KUALA LUMPUR (May 29): Capital A Bhd (KL:CAPITALA) has recorded its third consecutive quarterly loss, on the back of a massive foreign exchange (forex) loss and depreciation.

The owner of low-cost carrier AirAsia posted a net loss of RM91.55 million for the first quarter ended March 31, 2024 (1QFY2024), in contrast to a net profit of RM57.1 million in the same period last year, Capital A said in an exchange filing. It incurred RM370.9 million in forex losses as well as RM358.5 million in aircraft depreciation charges.

Revenue, however, more than doubled to RM5.24 billion — the highest quarterly revenue since it was listed in November 2004 — against RM2.52 billion in 1QFY2023, driven by strong demand recovery from domestic and international travel.

“This strong performance was fuelled by robust travel demand on the back of school holidays and festive celebrations across Asean together with better operating efficiency,” Capital A said.

The Practice Note 17 (PN17) firm noted that 89% of the group’s revenue was attributed to the aviation segment, while the remaining 11% was contributed by the logistics, digital and other businesses.

The group booked a net operating profit of RM304.9 million, excluding depreciation and finance costs for non-operating aircraft.

Loss per share of was 2.2 sen versus earnings per share of 1.4 sen in 1QFY2023.

No dividend was declared for the quarter.

On a quarter-on-quarter basis, Capital A’s net loss was narrower compared with RM159.57 million in 4QFY2023, as revenue grew 7.86% from RM4.86 billion in the immediate preceding quarter.

Moving into the second quarter, Capital A expects the aviation industry to see stable demand after the peak travel season.

“Our ongoing aircraft reactivation programme is nearing completion, with only 19 planes left to be reinstated in the second half of 2024. By year end, we aim to have 202 operational aircraft, boosting our capacity to serve the growing demand across our expanding network,” it said.

According to Capital A, about 20% of the 167 operating aircraft were not in operation during the quarter.

The group is expected to launch six international routes to capitalise on the surge in travellers from China and India due to the visa-free programmes in the next two quarters.

Additionally, Capital A is nearing the next step to divest its aviation business under AirAsia Group Sdn Bhd, as it is scheduled to submit the required documents to Bursa Malaysia soon.

“We target to obtain the approval from Bursa Malaysia by the end of June 2024. Subsequently, we plan to convene an extraordinary general meeting (EGM) in 3Q2024 to proceed with the necessary approvals,” it disclosed.

Addressing its PN17 status, Capital A expects to announce the regularisation plan in the second half of 2024, it reiterated.

“With all of the positive progress, the board is optimistic on the 2024 prospects and looks forward to delivering a robust performance in the year ahead,” it added.

Shares of Capital A fell one sen or 1.15% to close at 86 sen on Wednesday, valuing the group at RM3.66 billion. The stock has rebounded 32% from the low of 65 sen on April 19.