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Presentation - ChartNexus
Presentation - ChartNexus
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3rd Quarter 2010 Financial Results<br />
MAS returns to profitability with RM123mil operating profit<br />
<strong>Presentation</strong> to Analysts<br />
Tengku Dato’ Sri Azmil Zahruddin (MD/CEO)<br />
Mohd Azha b Abd Jalil (CFO)<br />
25 November 2010<br />
1
MAS returns to profitability with RM123mil op profit<br />
RM233mil in NIAT<br />
Operating Profit RM123mil vs 3Q09 operating loss of -RM77mil<br />
Net profit of RM233mil vs 3Q09 net loss of -RM300mil<br />
Highest seat factor in 15 years at 79%<br />
RASK increased by +10% from 17.2 sen to 18.9 sen. Yield improved by +7%<br />
from 22.4 sen to 24.0 sen<br />
Airline capacity up +4%, Load factor up +1.9ppt<br />
RPK increased by +7%<br />
Group CASK ex-fuel, ex-one-off redelivery charge decreased by 2.4% to<br />
16.4 sen. One-off charge for aircraft redelivery maintenance of RM96mil.<br />
Cargo improved with overall load factor increased by 4.3 ppts to 72% and<br />
yield increased by 26.4% to 81.7 sen.<br />
2
Operating Profit/(Loss)<br />
NIAT<br />
RM Million<br />
-138<br />
-695<br />
RM200m swing in operating profit,<br />
>RM500m swing in NIAT<br />
-426<br />
875<br />
-77<br />
-300<br />
1Q09 2Q09 3Q09<br />
4<br />
4Q09<br />
607<br />
290<br />
1Q10<br />
310<br />
-286<br />
-535<br />
2Q10<br />
123<br />
233<br />
3Q10<br />
3
Yield with<br />
fuel s/c<br />
Seat<br />
factor<br />
Yield<br />
without<br />
fuel s/c<br />
RASK<br />
Highest Seat Factor, Yield and RASK in FY2010<br />
31.7<br />
69.8%<br />
24.7<br />
65.3%<br />
56.1%<br />
65.8%<br />
76.7% 76.5%<br />
3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10<br />
22.1<br />
32.9<br />
24.7<br />
21.5<br />
29.5<br />
22.9<br />
23.4<br />
18.8<br />
22.4<br />
18.6<br />
23.1<br />
18.6<br />
74.8%<br />
74.0%<br />
78.6%<br />
16.6 15.4 17.2 17.7 17.4 17.7 18.9<br />
23.2<br />
19.7<br />
23.9<br />
20.3<br />
24.0<br />
20.4<br />
30<br />
25<br />
+10%<br />
20<br />
15<br />
10<br />
4
78.6%<br />
75.0%<br />
70.0%<br />
65.0%<br />
60.0%<br />
55.0%<br />
50.0%<br />
’97 Asian<br />
Financial Crisis<br />
Highest quarterly seat factor<br />
recorded in 15 years<br />
1995 1996 1997 1998 1999<br />
Sept 11<br />
SARs Global<br />
Financial Crisis<br />
2000 2001 2002 2003 2004<br />
2005 2006 2007 2008 2009<br />
2010<br />
5
Improved yield growth, high seat factor sustained<br />
Capacity increase in line with demand<br />
Pax Revenue<br />
(RM mil)<br />
Capacity ASK<br />
(Mil km)<br />
Seat Factor (%)<br />
RPK (Mil km)<br />
2,073<br />
1,721<br />
3Q09<br />
12,083<br />
76.7<br />
9,263<br />
3Q09<br />
Including fuel surcharge and admin fees<br />
+15%<br />
+18%<br />
+4%<br />
+1.9ppts<br />
+7%<br />
2,384<br />
2,027<br />
3Q10<br />
12,610<br />
78.6<br />
9,911<br />
3Q10<br />
*Excluding Firefly and MASwings<br />
RASK<br />
(sen/ASK)<br />
Yield<br />
(sen/RPK)<br />
17.2<br />
14.2<br />
3Q09<br />
22.4<br />
18.6<br />
3Q09<br />
+10%<br />
+13%<br />
+7%<br />
+10%<br />
18.9<br />
16.1<br />
3Q10<br />
24.0<br />
20.4<br />
3Q10<br />
6
MASkargo consistently outperforms industry<br />
80%<br />
78%<br />
76%<br />
74%<br />
72%<br />
70%<br />
68%<br />
66%<br />
64%<br />
62%<br />
76%<br />
67%<br />
*Source: AAPA, comprising data from 23 Asia-Pacific airlines<br />
71%<br />
74%<br />
Cargo LF<br />
78%<br />
70%<br />
72%<br />
76%<br />
Qtr 3 09 Qtr 4 09 Qtr 1 10 Qtr 2 10 Qtr 3 10<br />
MH AAPA<br />
+ 6 other AP airlines<br />
72%<br />
68%<br />
7
Cargo Revenue*<br />
(RM mil)<br />
Capacity CTKM<br />
(Mil km)<br />
Cargo Load<br />
Factor (%)<br />
Filled LTKM (Mil<br />
km)<br />
* Including (cargo) fuel surcharge<br />
MASkargo: Fourth consecutive quarter of profits<br />
even as growth moderates<br />
360<br />
733.2<br />
76.1<br />
558<br />
+34%<br />
+13%<br />
484<br />
3Q09 3Q10 3Q09 3Q10<br />
-4.2ppts<br />
+6%<br />
824.9<br />
71.9<br />
593<br />
3Q09 3Q10<br />
RCTKM*<br />
(sen/CTKM)<br />
Yield*<br />
(sen/LTKM)<br />
49.2<br />
64.6<br />
+19%<br />
+26%<br />
58.7<br />
81.7<br />
3Q09 3Q10<br />
8
Overview of Group Profit & Loss 3Q10 vs 3Q09<br />
(RM million) 3Q10 3Q09<br />
Revenue<br />
Passenger<br />
Cargo<br />
Expenditure<br />
Fuel<br />
Non-fuel<br />
3,400<br />
3,277<br />
1,068<br />
2,209<br />
2,944<br />
Pax Revenue 2,080 1,762<br />
Surcharges* 376 365<br />
Belly & Freighter 361 274<br />
Fuel Surcharge 124 87<br />
Other Revenue<br />
Derivative gain/(loss)<br />
Share of results of Associated Companies<br />
459<br />
156<br />
3<br />
455<br />
3,022<br />
954<br />
2,067<br />
Operating Profit/(Loss) 123 (77)<br />
(202)<br />
Finance costs (45) (16)<br />
Taxation (2) (2)<br />
Profit/(Loss) 231 (297)<br />
Minority Interest (1) (1)<br />
NET INCOME AFTER TAX (NIAT) 233 (300)<br />
*Pax surcharges include fuel surcharge, insurance and admin fees<br />
(2)<br />
Total revenue<br />
increased by 15%<br />
Passenger revenue<br />
including surcharges<br />
increased 15%<br />
Cargo revenue<br />
including surcharges<br />
increased 34%<br />
Increase in fuel<br />
expenditure by 12%<br />
due to higher fuel<br />
prices and<br />
consumption<br />
Non-fuel expenditure<br />
increased by 7%<br />
RM200m swing<br />
in operating<br />
profitability<br />
>RM500m<br />
swing in NIAT<br />
9
RM Mil<br />
954<br />
3Q10 fuel cost movement vs 3Q09<br />
+9<br />
Realised<br />
portion of<br />
hedging gain<br />
vs last Q<br />
+68<br />
+7%<br />
higher<br />
volume<br />
3Q09 Hedging<br />
Volume<br />
Price Forex 3Q10<br />
+138<br />
Price<br />
increased by<br />
USD11<br />
-101<br />
USD<br />
weakened<br />
by 0.34 cents<br />
3Q10: 3.20<br />
3Q09: 3.54<br />
1,068<br />
10<br />
10
Good progress made in aircraft redelivery plans<br />
Future uncertainties reduced<br />
Provisions for aircraft redelivery involve leased A330<br />
and B734 aircraft<br />
We have firmed up redelivery of 13 (provision made in<br />
2Q10 - RM109mil) and 14 (provision made in 3Q10 –<br />
RM96mil) aircraft so far<br />
4 aircraft remaining – expect to be firmed up by 2Q11<br />
11
2,510<br />
497*<br />
2,013<br />
30 th June<br />
2010<br />
* Negotiable Instruments of Deposits<br />
Positive operating cashflow moderated<br />
by progress payments for fleet renewal<br />
+190<br />
-424<br />
-16<br />
Operating Activities<br />
Capex<br />
Financing Activities<br />
2,260<br />
396*<br />
1,864<br />
30 th Sept<br />
2010<br />
12
Strong balance sheet to support profitable growth<br />
RM mil 30 Sep 2010 31 Dec 2009<br />
Cash<br />
RM2,260<br />
2,121<br />
RM2,952<br />
2,665<br />
Negotiable Deposit 139 287<br />
Other Current Assets 1,777 1,781<br />
Non Current Assets 7,936 3,781<br />
Deferred Tax Assets 34 34<br />
Total Assets 12,007 8,548<br />
Long Term Borrowing (3,067) (2,004)<br />
Other Liabilities (5,651) (5,833)<br />
Total Liabilities (8,717) (7,837)<br />
Net Assets 3,289 712<br />
Represented by:<br />
Shareholders’ Equity 3,275 700<br />
Minority Interests 14 12<br />
13
YTD<br />
Financial Highlights<br />
14
Significantly better performance for YTD10<br />
Operating profit of RM127mil (YTD Sept09: -RM644mil)<br />
NIAT of RM9m (YTD Sept09: -RM120mil)<br />
RASK increased by +10% from 16.4 sen to 18.0 sen. YTD10 yield lower than<br />
YTD09 by -5% (from 24.8 sen to 23.7 sen)<br />
Traffic up +17%, seat factor up 9.7ppts to 76%, capacity up +2%<br />
Group CASK ex-fuel, ex-one-off redelivery charges improved by 3% to 17.04<br />
sen. YTD one-off charges for aircraft redelivery maintenance of RM205m.<br />
Cargo improved with overall load increased by +6.5ppts to 75% and yield higher<br />
by 22% to 82.0 sen.<br />
Raised RM2.67b through Rights Issue. Equity stood at RM3.28b.<br />
15
2011 and beyond:<br />
Profitable Growth<br />
16
2009<br />
Making the<br />
Most<br />
• Serve Customer: Maintain<br />
5-Star products and<br />
services<br />
• Make Money: Stimulate<br />
demand, increase load<br />
factors<br />
• Save Money: Structural<br />
Cost Reduction<br />
Positioning for Profitable Growth<br />
2010 2011 and beyond<br />
Gearing for<br />
Growth<br />
• Strengthen balance sheet<br />
• Fleet renewal programme<br />
• Systems and infrastructure<br />
• CASK reduction<br />
• Improve customer<br />
experience at touchpoints<br />
Profitable<br />
Growth<br />
• New fleet and network<br />
• New growth areas, e.g.<br />
Firefly, BKI hub<br />
• Maximise revenues<br />
through aggressive sales<br />
and yield management<br />
17
New fleet &<br />
network expansion<br />
18
Arrival of the first B737-800 marks<br />
a new beginning for MAS<br />
19
Competitive product and services with new fleet<br />
Highly positive feedback on B738 offerings<br />
20
New Growth Areas<br />
21
Launch of Kota Kinabalu as Eastern Hub<br />
22
Firefly expansion paves the way<br />
for better focus in product & services offering<br />
MASkargo<br />
MASwings<br />
MRO<br />
SCR<br />
Delta<br />
PSS<br />
ERP<br />
Firefly<br />
Network<br />
Fleet<br />
Breaking New Ground (BNG)<br />
Gaining New Business (GNB)<br />
Making the Most (MTM)<br />
2005 2007 2008 2009 2010 2011 2012<br />
*From MAS’ BTP2<br />
23
Segmentation of market reach ensures<br />
better focus and improved competitiveness<br />
Fares<br />
*For Illustration only<br />
AK JQ<br />
TR<br />
FY<br />
TG<br />
CX<br />
EK<br />
Products & services<br />
MH<br />
SQ<br />
24
Maximising revenues<br />
25
2011: Aggressive Global Sales Campaigns / Activities<br />
MEASA<br />
•Sales Bonanza<br />
(Online & ATL)<br />
UK & EUROPE<br />
•Malaysia Airlines Travel Fairs<br />
(MATF)<br />
•Joint Sales Campaigns with NTO’s<br />
•Online Sales Campaigns<br />
S.Asia<br />
•Monthly Online Sales Campaigns<br />
•Joints Sales Campaigns with<br />
NTO’s<br />
•Joint Agents Sales Campaigns<br />
CHINA & SAR<br />
•Malaysia Airlines Travel<br />
Fairs (MATF)<br />
•Joint Sales Campaigns<br />
with Agents<br />
Malaysia<br />
•Malaysia Airlines Travel Fairs<br />
(MATF)<br />
•Global Sales<br />
•MITF & MATTA Fairs<br />
•Domestic Travel Fairs<br />
•Online Sales Campaigns<br />
North Asia &<br />
Americas<br />
•Online Sales<br />
Campaigns<br />
•Joint Sales<br />
Campaigns with<br />
NTO’s<br />
ASEAN<br />
•Malaysia Airlines<br />
Travel Fairs<br />
(MATF)<br />
•Global Sales<br />
•Online Sales<br />
Campaigns<br />
Australia & New Zealand<br />
•Flight Centre Expo’s<br />
•Early Birds Mega Sales ie<br />
Autumn, Winter, Spring &<br />
Summer Sales<br />
26
2011: Leverage on Social Media tools<br />
to drive revenue<br />
Engagement<br />
Promotion<br />
Recruitment<br />
www.facebook.com/MAStravel<br />
207,830 207,830 fans fans<br />
www.twitter.com/MAS<br />
23,048 23,048 followers followers<br />
www.malaysiaairlines.com<br />
www.MAStraveller.com<br />
Promotion<br />
www.facebook.com/MHdeals<br />
43,122 43,122 fans fans<br />
www.twitter.com/MHdeals<br />
4,401 4,401 followers followers<br />
27
Boosting traffic and sales via social media tools<br />
e.g. 72 Hours Merdeka Sale<br />
Booking<br />
Profile<br />
Normal<br />
Weekend<br />
Booking<br />
Internet<br />
Booking<br />
Normal Weekend<br />
2X<br />
Merdeka Weekend<br />
Merdeka<br />
Weekend<br />
Promo<br />
Last Minute Travel Future Travel<br />
28
2011: Maximising yield<br />
• Increase front-end seat factor<br />
• Increase pricing competitiveness<br />
• Introducing revenue management by origin &<br />
destination<br />
• Leverage on interline and code share<br />
agreements<br />
• Training refresh to improve yield management<br />
skills and competencies<br />
29
2011: Less uncertainties ahead<br />
EU Antitrust<br />
No finding of anti trust infringement by<br />
EU Commission against MAS and<br />
MASkargo, no fines imposed<br />
Aircraft Redelivery<br />
27 aircraft redelivery firmed up so far<br />
4 remaining expected to be firmed up by<br />
2Q11<br />
2011 Fuel Hedge<br />
Restructuring<br />
Hedge levels: from 40% to 33% now<br />
Average price: from USD100/bbl to<br />
USD93/bbl now<br />
Aircraft Funding<br />
Funding for all incoming aircraft in 2011<br />
has been lined up<br />
30
Key Highlights:<br />
Well-positioned for profitable growth<br />
Highest load factors in 15 years<br />
Sustainable growth in yields<br />
Capacity growth in line with growth in demand<br />
Higher competitiveness with new fleet<br />
Non-fuel costs contained<br />
Aggressive sales and yield initiatives lined up<br />
Better focus on respective MH and FY market<br />
segments<br />
2011 uncertainties significantly alleviated<br />
31
MAS’ Latest Awards & Recognition<br />
World's Leading Airline to Asia,<br />
Asia’s Leading Airline,<br />
Asia’s Leading Business Class Airline<br />
- World Travel Awards (WTA) 2010<br />
Best Use of Social Media to Drive Revenue<br />
- Simpliflying-Airline Business Social Media Excellence Awards<br />
for Airlines<br />
Staff Service Excellence for Asia Award 2010<br />
- Skytrax, UK<br />
World's Best Economy Class Award 2010<br />
- Skytrax, UK<br />
Best Value Airline of The Year Award (Commercial Air<br />
Transportation Category - Firefly)<br />
- 2010 Frost & Sullivan Asia Pacific Aerospace & Defence Awards<br />
For IR queries, please email aizzura@malaysiaairlines.com<br />
For media queries, please email suwong@malaysiaairlines.com<br />
32
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