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Capital A hits turbulence with RM160mil net loss in Q4
Published on: Thursday, February 29, 2024
By: FMT, Lee Min Keong
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Capital A hits turbulence with RM160mil net loss in Q4
Capital A returned to the black after four consecutive years of losses with a net profit of RM836.99 million in FY2023. (Bernama pic)
PETALING JAYA: Capital A Bhd closed its financial year ended Dec 31, 2023 (FY2023) on a disappointing note after suffering a fourth quarter net loss of RM159.57 million from a net profit of RM109.95 million a year ago.

Despite Q4 revenue surging 121% to RM4.86 billion from RM2.2 billion on strong recovery of domestic and international travel, it sank into the red on higher operating expenses, financing costs, and asset depreciation.

It was bittersweet for Tony Fernandes’ aviation group as Capital A returned to profitability after four consecutive years of losses with a net profit of RM836.99 million in FY2023 versus a net loss of RM2.63 billion in FY2022.

Full-year revenue more than doubled to RM14.77 billion from RM6.44 billion in the previous year, it said in a filing with Bursa Malaysia today.

“In 2023, we made significant strides across multiple fronts, overcoming Covid-19 challenges with resilience and determination.

“As a result, our group revenue has not only rebounded but surpassed pre-Covid levels even with operating only 74% of 2019 airline seat capacity. Additionally, we achieved full-year net profitability, a significant achievement since the pandemic,” it said.

Capital A expects to achieve 90% of its pre-Covid capacity with a target of full aircraft activation by mid-2024 along with the addition of nine more aircraft. It had reactivated 185 planes by last December.

Regional expansion

It also plans to launch more than 60 new routes, expand further in China and India, and start its Cambodian operations in mid-2024.

It noted that competition in its two largest markets – Malaysia and Thailand – appeared to be easing, allowing for more equitable fare pricing.

“While cost pressures remain high, particularly from the weak Asean currencies, we have put in place control measures to ensure efficiencies,” it said.

On its non-aviation business, Capital A is targeting its BigPay division to achieve its first month of positive earnings by end 2024.

The group said the pandemic had accelerated its diversification efforts into non-airline businesses.

“We emerged with five distinct verticals: AirAsia Aviation Group, Capital A Aviation Services, Teleport, Move Digital, and Capital A International. These verticals form the cornerstone of our post-pandemic growth strategy,” it added.

Capital A said it is finalising its PN17 regularisation plan and aiming for submission to Bursa in the “near future”.

It added the proposed plan involves two major corporate exercises currently in motion. Firstly, the proposed disposal of the AirAsia Aviation business, and the proposed public listing of Capital A International via a de-SPAC exercise with Nasdaq-listed special purpose acquisition company (SPAC) Aetherium Acquisition Corp.

Its shares ended 2.5 sen or 3.5% lower at 69 sen, giving it a market capitalisation of RM2.9 billion.

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