KUALA LUMPUR (Nov 22): RHB Research Institute has reduced the indicative fair value for MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) by 27% from RM1.43 to RM1.04 based on 1.5 times book value of 69 sen, in line with its regional peers
It said on Tuesday that MAS’s 9MFY12/11 results came in below expectations with a core net loss of RM1.034 billion (excluding RM212.5 million in derivative losses).
RHB Research said the losses “already exceeded our full-year net loss forecast of RM967.2 million as well as the market’s full-year net loss forecast of RM970.6 million”.
The research house also pointed out that and MAS expects “4Q operational results to be weaker than 3Q”.
It believed the key variance against its forecast came from MAS’ inability to contain the escalation in fuel and non-fuel costs.
The research house added that MAS also spoke about chopping unprofitable routes, expanding higher-yielding Asian routes and accelerating the return of ageing aircraft to improve fuel burn. It will be announcing a comprehensive business plan next month.
“Having reflected higher fuel and non-fuel costs, we now project MAS to report a larger net loss of RM1.257 billion in FY12/11 vis-a-vis RM967.2 million net loss we projected previously. For the same reason, FY12/12-13 net profit forecasts are cut by 53%-63%,” it said.
It said on Tuesday that MAS’s 9MFY12/11 results came in below expectations with a core net loss of RM1.034 billion (excluding RM212.5 million in derivative losses).
RHB Research said the losses “already exceeded our full-year net loss forecast of RM967.2 million as well as the market’s full-year net loss forecast of RM970.6 million”.
The research house also pointed out that and MAS expects “4Q operational results to be weaker than 3Q”.
It believed the key variance against its forecast came from MAS’ inability to contain the escalation in fuel and non-fuel costs.
The research house added that MAS also spoke about chopping unprofitable routes, expanding higher-yielding Asian routes and accelerating the return of ageing aircraft to improve fuel burn. It will be announcing a comprehensive business plan next month.
“Having reflected higher fuel and non-fuel costs, we now project MAS to report a larger net loss of RM1.257 billion in FY12/11 vis-a-vis RM967.2 million net loss we projected previously. For the same reason, FY12/12-13 net profit forecasts are cut by 53%-63%,” it said.
