KUALA LUMPUR (March 21): Malaysia Aviation Group (MAG), the parent company of national carrier Malaysia Airlines Bhd (MAB), is expected to be able to run its businesses relying solely on its operational cash flow without further capital injections from its sole shareholder Khazanah Nasional Bhd moving forward, according to MAG group managing director Datuk Captain Izham Ismail.

This comes after the aviation group posted an annual net profit in 2023 for the first time since the launch of its recovery plan in 2014, without resorting to any capital injections from the sovereign wealth fund during the year.

"We were able to sustain [the business] in 2023 from our own operations. Our cash balances were all generated through [our] operations. Hence, there is no need for MAG to request for more funding from our shareholder.

"Yes, our ambition is we do not want any more drawdowns from our shareholder [Khazanah], and we hope we will remain in this position," he told reporters at a press conference here on Thursday.

As at the end of December 2023, MAG's cash balance stood at RM4.27 billion, down 6% from RM4.56 billion in the previous year, due to capital expenditure spending.

For 2024, MAG expects cash to remain positive on a daily basis.

As part of a financial restructuring exercise, Khazanah in 2021 committed to inject a total of RM3.6 billion in new capital to fund MAG's business until 2025.

However, Izham on Thursday revealed that MAG had received less than half of that amount or RM1.3 billion.

"To start the ball rolling following the restructuring, Khazanah pumped in RM1.3 billion. From then on, MAG has reinvented itself by pulling all the right levers on its strategy, and the remaining was never drawn down," he said.

Notably, the RM16 billion debt restructuring plan that was given the green light by the UK High Court in March 2021 involved all of MAG’s key stakeholders, which saw bilateral agreements signed between the group and finance lessors, spare engine lessors, maintenance service providers, corporate lenders, and government of Malaysia-related entities.

Key elements of the restructuring included network cuts, structural cost savings, cash conservation and payment deferral initiatives.

However, it is worth noting that prior to 2021, it was reported that a total of RM28 billion was injected into MAB by Khazanah until then.

When asked whether the aviation group will start paying dividends to Khazanah, Izham said he envisions MAG to be able to give back to its shareholder some time in the future.

"No conversation at this current time, but that would be the ideal state," he said.