Capital A Berhad’s (Capital A) core business operations generated RM1 billion in operating cash flow for the quarter ended 30 June 2023 (2Q2023).
All four business segments – Aviation, Aviation Services, Logistics and MOVE continue to show strong growth, leading the Group to post Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of RM462 million in 2Q2023, up 325% Year-on-Year (YoY) while revenues increased to RM3.2 billion, representing a 115% YoY growth.
Capital A CEO Tan Sri Tony Fernandes said: “During the quarter, AirAsia Group has increased its effective control of Philippine AirAsia to 100%. I am thrilled that my journey of 21 years of running AirAsia, we have finally brought together the four short-haul airlines under Asia Aviation Public Company Limited (AAV), comprising AirAsia Malaysia, AirAsia Thailand, AirAsia Indonesia and AirAsia Philippines (the “Consolidated Airlines”) in the 2Q2023 financial performance. This strategic move allows analysts and investors to have a clearer view of our accounts.
Capital A has arrived as a low-cost, high-value, inclusive aviation and travel group delivering value for our non-aviation companies, with all of them being EBITDA positive, with Bigpay on its way. The Group is also in the midst of finalising fundraising efforts for Superapp and Teleport. The core purpose of these funds will be used for business expansion and enhance operational capabilities to create a distinct competitive advantage.
“The Group’s ecosystem of travel and lifestyle offerings remains a formidable strategic advantage, fostering mutual growth and synergy among its diverse components.
Encouraging trend in international travel activity boosted the aviation business segmental revenue to RM2.9 billion and an EBITDA of RM405 million. In 2Q2023, the Group recovered 77% and 74% of 2Q2019 passengers carried and capacity.
The group churned a net profit of RM1.12bil compared with a net loss of RM931.22mil in the same quarter a year ago, on the back of year-on-year revenue for the quarter that more than doubled to RM3.15bil.
Overall, its aviation segment reported an earnings before interest, taxes, depreciation and amortisation of RM404.7mil compared to RM151.5mil in the same period last year, backed by higher passengers carried and capacity.
“We now have a line of sight on the completion of our planes. As of today, we have successfully taken 175 aircraft out of storage, and expect to restore into service 180 by the end of the third quarter.
“Our target is to reinstate a total of 200 planes back into operations by year-end,” Capital A said in its financial statements uploaded to the Bursa Malaysia.
“In addition to fleet reactivation, we anticipate further upside from the current high yield environment. In the second quarter, fares remained 15% higher than pre-Covid levels in the same quarter of 2019 and we anticipate a pick up in the second half to peak in the fourth quarter,” it added.
The group said it is supported by the upward trajectory of ancillary revenue per passenger, which is projected to gain momentum to reach US$358mil (RM1.66bil) in the second half, up 27% compared to the same period pre-Covid, driven by strong new product initiatives and dynamic pricing.
It also expects costs to continue its downward trend moving forward from the consolidation of Asia Aviation Public Co Ltd, which would enable it to achieve cost efficiency in aircraft maintenance, staff and user charges.
“The group is on track with its expansion in the Asean region, with the imminent launch of AirAsia Cambodia expected to further contribute to our growth,” Capital A said.
Meanwhile, its maintenance, repair and overhaul (MRO) division called Asia Digital Engineering (ADE) is also aggressively expanding to Thailand, Indonesia and the Philippines with operations expected to commence by the end of this year.
“ADE has been proactively collaborating with airlines to expand its MRO services to countries where our airlines plan to operate. This strategic approach enables both businesses fostering mutual support for growth and operations,” Capital A said.
ADE reported a revenue of RM137.9mil in the second quarter which is an increase of 83% against the same quarter in 2022, as travel resumption and increased flights drove the demand for MRO services.
Moving forward into the second half of 2023, the group said it remains steadfast in leveraging the synergy of its businesses for continued growth and value.
“With all of the strategies put in place, the board expects the group to perform better than the previous year,” it said.
