KUALA LUMPUR (Feb 29): Capital A Bhd sank into the red for the final quarter of 2023, dragged by higher operating expenses, asset depreciation and higher financing costs.
Net loss for the three months ended Dec 31, 2023 was RM159.57 million compared with net profit of RM109.95 million over the same period a year prior, Capital A said in an exchange filing. Revenue, however, more than doubled year-on-year to RM4.86 billion from RM2.20 billion on strong recovery of both domestic and international travel demand.
Looking ahead, Capital A said it expects to achieve 90% of its pre-Covid capacity with a target of full aircraft activation by mid-2024 and the addition of nine more aircraft.
The company also aims to launch more than 60 new routes, expand further in China and India, and plan to start its Cambodian operations in mid-2024.
Competition in its two largest markets, namely Malaysia and Thailand, appeared to be easing, allowing for more equitable fare pricing, Capital A noted.
Cost pressures remain high, particularly amid weakened Asean currencies, though “we have put in place control measures to ensure efficiencies”, it said.
Nevertheless, Capital A returned to the black after four consecutive years of net losses with net profit of RM836.99 million in FY2023 versus a net loss of RM2.63 billion in FY2022. Revenue for the full year more than doubled to RM14.77 billion from RM6.44 billion a year earlier.
On its non-aviation business, Capital A is targeting for its BigPay division to achieve its first month of positive earnings before interest, taxes, depreciation, and amortization by the end of 2024.
Meanwhile, its Asia Digital Engineering division was said to be exploring mergers and acquisitions to fortify its capabilities and solidify its market presence.
“Concurrently, we are in the final stages of finalising our PN17 (Practice Note 17) regularisation plan and aim for a full submission to Bursa Malaysia in the near future," it said.
The proposed regularisation plan involves two major corporate exercises currently in motion — the proposed disposal of the AirAsia Aviation business and the proposed listing of Capital A International on Nasdaq, it added.
Capital A’s shares turned lower on Bursa Malaysia following the results announcement. At the time of writing, the stock was down 1.5 sen or 2.1% to 70 sen, valuing the group at RM2.96 billion. So far this year, Capital A has declined more than 15%.