SUBANG (Aug 30): Capital A Bhd (KL:CAPITALA) is expected to see a better July-September quarter on the strengthening of the ringgit and other Asean currencies, said chief executive officer (CEO) Tan Sri Tony Fernandes after its April-June quarter disappointed, despite rebound in passenger count.
Capital A’s losses in 2QFY2024 — its fourth quarter in the red — were primarily due to accounting methodology and foreign exchange fluctuations, rather than underlying business performance, Fernandes said.
The low-cost carrier is poised to have a “fantastic” year in 2025, once its fleet nears full reactivation, he added.
“We are in losses because of ‘accounting’ and foreign exchange. So next quarter, we will have a huge gain because the ringgit has strengthened a lot, as well as the baht and the rupiah,” Fernandes told reporters when asked to comment on Capital A’s quarterly results at the launch of flights to East Malaysia at the Sultan Abdul Aziz Shah Airport (Subang Airport) on Friday.
Optimism towards FY2025 stemmed from the fact that it will have most of its 218 aircraft operational by the end of 2024, from 168 at end-June — a 22% increase year-on-year.
“I think next year will be a great year. As far as I’m concerned, [pertaining to] the black [profitable] — it’s just a foreign currency, which is accounting. Every quarter, they (accountants) look at our US dollar-debt and they just translate it, and then they book it into the P&L (profit and loss),” he explained.
Net loss for the three months ended June 30, 2024 (2QFY2024) widened to RM454.18 million, marking its fourth consecutive quarter in the red. That compares to a net loss of RM91.55 million in 1QFY2024, and a net profit of RM646.28 million in 2QFY2023.
Capital A incurred RM403.9 million in foreign exchange losses and RM175 million in aircraft depreciation charges during the latest quarter.
Quarterly revenue, however, rose 54% to RM4.86 billion as compared to RM3.15 billion a year ago, thanks to strong recovery from domestic and international travel, which offset the higher fuel expenses and maintenance costs.
The group saw passenger volume rise 11% year-on-year to 15.6 million in 2QFY2024.
For the first half ended June 30, 2024 (1HFY2024), Capital A recorded a net loss of RM545.73 million, from a net profit of RM703.38 million in 1HFY2023. Meanwhile, revenue surged 77.87% to RM10.10 billion, from RM5.68 billion in the same period last year.
On Thursday (Aug 29), Fernandes said that Capital A is now aiming to exit the Practice Note 17 (PN17) status by the first half of 2025 (1HFY2025), according to a statement accompanying the company’s quarterly results.
Shares of Capital A slipped two sen or 2.53% to 77 sen at noon market break on Friday, giving it a market capitalisation of RM3.32 billion.
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