Bangkok--13 May--Thai Airways
Thai Airways International Public Company Limited (THAI) announced its 1st quarter operating results for 2013. The Company had net profit of THB 8,295 million, which was THB 3,054 million or 58.3 percent higher than last year. Net profit Margin was 14.8 percent, which was higher than the same quarter last year of 9.7 percent.
Dr. Sorajak Kasemsuvan, THAI President, said that the global economic growth in 2013 is likely to continue at a diminished pace. Despite the economic weakness of the European Union, Asian economic indicators show resilience while the US economy shows signs of recovery. During the first quarter of 2013, the airline industry still saw satisfactory growth due to higher passenger transport numbers and air cargo shows signs for potential recovery. Over the past year, freight traffic demand for Asia Pacific airlines have been negatively impacted by the economic slowdown in many countries, especially the Eurozone which have been key traditional export markets for air cargo service. Amidst tough competition within the commercial airline industry, THAI adhered to its strategic initiatives and concentrated on building brand reputation, and delivering an appropriate level of profitability while ensuring the Company’s long-term sustainability and to be among the forefront airlines in Asia.
In the first quarter of 2013, THAI added 5 new aircraft to its fleet while decommissioning older aircraft. Available Seat Kilometers (ASK) increased by 5.5 percent over the same period last year while Revenue Passenger Kilometers (RPK) also increased 7.7 percent. Consequently, cabin factor averaged at 79.8 percent as compared to last year’s recorded 78.2 percent. THAI continued to adhere to its corporate portfolio strategy through the expansion of THAI Smile’s routes between Bangkok - Mandalay and Bangkok - Ahmedabad starting March 31, 2013. Other routes that THAI Smile also plans to launch include Phuket - New Delhi, Phuket - Mumbai and Phuket - Kuala Lumpur starting April 2013 onwards.
Corporate risk management continues to be the core concern at THAI and with fuel cost being the largest proportion of its cost, THAI has been proactively employing fuel hedging to better manage its overall fuel cost while employing a natural hedging strategy to mitigate foreign currency fluctuation. To offset some of the rapid baht appreciation over the past few months, THAI shifted its strategy to expand more baht currency revenue along with better matching its net long revenue positions with corresponding currency borrowings which is designed to mitigate the cash impact on THAI’s operations.
THAI and its subsidiaries’ financial performance in the first quarter of 2013 showed an operating profit of THB 4,443 million which is THB 180 million or 3.9 percent lower than last year resulting from a more rapid increase in cost. The reason for the slight decline in operating profitability is the weaker revenue earned from cargo services but the expenses side rose due to increased traffic production, payment of staff performance incentive and accrued annual staff welfare. The depreciation charge for the first quarter also declined resulting from the change in depreciation estimate whereby all aircraft are to be depreciated 20 years from the previous policy of 15 years. There was also an adjustment on impairment of aircraft held for sale in the amount of THB 2,260 million. Consequently, profit before foreign currency exchange and income tax was THB 1,903 million, a decrease of THB 3,011 million or 61.3 percent from last year.
In the first quarter of 2013, THAI’s consolidated gain on foreign currency exchange was THB 6,129 million, which was THB 5,602 million higher than last year. Consequently, THAI and its subsidiaries reported net profit of THB 8,295 million, an increase of THB 3,054 million or 58.3 percent from last year. Profit attributable to owners of the parent was THB 8,283 million or 3.79 baht per share, an increase from last year where was 2.39 baht per share. Net profit Margin was 14.8 percent, which was higher than the same quarter last year where recorded 9.7 percent.
EBITDAR was THB 10,266 million, which decreased by THB 700 million or 6.4 percent over last year. EBITDAR margin was 18.3 percent lower than last year's 20.3 percent.
As of March 31, 2013, THAI and its subsidiaries’total assets were THB 307,657 million, an increase of THB 3,561 million or 1.2 percent from as at December 31, 2012. Return on assets was 3.09 percent, which was higher than the same period last year. Total liabilities were THB 230,261 million, which was a decrease of THB 4,017 million or 1.7 percent from as of December 31, 2012. Shareholders’ equity totaled THB 77,396 million as of December 2013, an increase of THB 7,578 million from December 31, 2012, This resulted in the decrease of interest bearing debt to equity ratio from 2.27 times last year to 2.02 times this year. Hence, return on equity increased from 8.0 percent in the first quarter last year to 11.3 percent in the first quarter this year.