Malaysia Airlines reports 3rd consecutive quarterly profit

[quik!]

Malaysia Airlines reports 3rd consecutive quarterly profit
The Associated Press
Published: May 28, 2007

KUALA LUMPUR, Malaysia: Flagship carrier operator Malaysian Airline System Bhd. reported its third straight quarterly profit Monday and significantly raised its full-year earnings forecast, thanks to higher operating revenue and passenger yields.

The airline reported a net profit of 132.7 million ringgit (US$39 million; €29 million) for the quarter ended March 31, a turnaround from a loss of 321 million ringgit in the same quarter of 2006.

Total revenue increased to 3.64 billion ringgit (US$1.1 billion; €820 million) from 3.02 billion in the same quarter last year, the airline said.

Malaysia Airlines said in a statement it now expects a full-year net profit of between 300 million ringgit (US$88 million; €65 million) and 700 million ringgit (US$206 million; €153 million), much higher than an earlier forecast of 50 million ringgit ($15 million; €11 million).

Financial returns have improved after the airline dropped unprofitable routes and introduced cost cutting measures last year. The airline started a three-year restructuring, including layoffs of up to 6,000 people, to return it to sustained profitability.

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Malaysia Airlines In The Market For 110 New Planes
May 28, 2007

National carrier Malaysia Airlines on Monday revealed plans to order about 110 new aircraft as part of a seven-year plan to overhaul its entire fleet. The state-controlled airline, recovering from a cash crisis 18 months ago, said it wanted about 55 wide-bodied long-range aircraft and 55 narrow-bodied medium-range planes -- a shopping list it said could be worth up to USD$14.3 billion at list prices.

Malaysia Airlines was already known to be in the market for narrow-bodied planes, such as the Airbus A320, Bombardier C series and Boeing 737. It chose its first-quarter results briefing on Monday to announce it was also looking for another roughly 55 wide-bodied planes, such as the new Airbus A350 and Boeing 787 Dreamliner.

"We plan to issue another request for proposal for wide-bodied aircraft," Chief Financial Officer Tengku Azmil Zahruddin Raja Abdul Aziz told reporters. "That will happen in the next one or two months, so our guys will be quite busy looking at the different aircraft," he added. Malaysia Airlines currently runs a fleet of about 80 planes, mostly Boeings. It plans to replace its current fleet by 2014. Tengku Azmil Zahruddin said plane orders would be funded by a recent rights issue and cash flow, and Chief Executive Idris Jala said it was too early to decide if any extra debt was required.

The airline reported January-March net profit of MYR133 million ringgit (USD$39.3 million) compared with a loss of MYR321 million ringgit a year earlier. It returned to profit in the third quarter of 2006, having slashed costs and unprofitable routes. Revenues have also begun to pick up: they grew 21 percent in the first quarter.

The airline attributed the growth in revenues and profits to better yields and a stronger domestic performance after the government overhauled local routes. Malaysia Airlines handed many of its undesirable routes to budget airline AirAsia. Malaysia Airlines also benefited in the first quarter from gains on the sale of properties, though it did not quantify them.

But the firm warned of an increasingly competitive outlook. "Competition will remain intense, and yields are expected to be under tremendous pressure from price discounting and capacity injections as record aircraft deliveries are expected in 2007," the airline said. "Aggressive promotional efforts by our competitors in the domestic and ASEAN (Southeast Asian) markets will impact the outbound travel from Malaysia."

(Reuters)

[flyguy]

well some of its profits are actually from MH selling its properties and assets (ie some planes) - so once they run out of properties and assets to sell; their profit will be less - that is if they still make a profit - and once the malaysian govt allows the LCCs to operate the KUL-SIN-KUL sector earlier then MH will definitely be in the red as it wa reported that this sector alone is the most profitable for MH and it accounts heavily for its bottomline.

[KeithMEL]

well some of its profits are actually from MH selling its properties and assets (ie some planes) - so once they run out of properties and assets to sell;- that is if they still make a profit

I think the asset stripping ceased a while ago.

From MH's own press release:

Operating profit accounted for RM129 million (before finance costs and exceptional items), the airline’s third successive operational profit and highest since the BTP was announced in February 2006.

http://www.malaysiaairlines.com/Abou...nfo/Media.aspx

[flyguy]

oh from its MH site, it didnt mention but last couple of days when it announce its profits in the press, it did mention that it sold assets worth rm17 million in latest quarterly profit.