Malaysia Airlines defies industry slump, reports record profit

[quik!]

PETALING JAYA, Aug 6 — Malaysia Airlines (MAS) recorded its highest ever quarterly net profit despite the ongoing slump in the airline industry due to the global economic slowdown.

Its net profit of RM876 million offset first quarterly losses of RM695 million leading to a first half net profit of RM181 million.

The airline had implemented very aggressive sales campaigns to deal with the worst ever crisis facing the industry. Load factors subsequently increased to 66 per cent in the second quarter compared to 56 per cent in the first quarter.


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http://www.themalaysianinsider.com/i...-record-profit

[milehighj]

Hmmmm, what is the world coming to?

SQ mega quarterly loss, MH record quarterly profit...

And this disgruntled PPS member hasn't even sent MH any spending - YET!!!

[s7r0ng3r]

A cause for celebration for the MH folk. Good job!

[SQflyergirl]

Had a look at the results: it was an operating loss of MYR 420 million. They managed this profit because of a 1.3 billion MYR fuel hedge gain.

As such, it's not as peachy as it seems. Operating revenue was down some 30 odd % too.

[HUGE AL]

Had a look at the results: it was an operating loss of MYR 420 million. They managed this profit because of a 1.3 billion MYR fuel hedge gain.

As such, it's not as peachy as it seems. Operating revenue was down some 30 odd % too.

I love how numbers and charts can be skewed. Kind of like how so many startups use the EBITDA term.

[jadivindra]

Guess what matters is that at the end of the day they had 1.3 mill in their pocket,. How they did that ( fuel hedging or other strategies) is irrelevant.

KUALA LUMPUR: MALAYSIAN AIRLINE SYSTEM BHD [ MAS 3.100 -0.010 (-0.322%) ] (MAS) posted net profit of RM875.51 million in the second quarter ended June 30, due to a RM1.34 billion fuel hedge gain.

MAS announced on Aug 6 the gains were due to a reversal of the hedging losses of RM640 million in the first quarter.

The group recorded an operating loss of RM420.8 million in 2Q compared with profit of RM62.0 million a year ago mainly due to lower operating revenue in line with the declining trend in global travel and cargo movements resulting from the current economic downturn.

Derivative gain/(loss) consisted of realised gain/(loss) on settlement of hedging contracts during the quarter and fair value changes due to movement in mark-to-market (MTM) position on outstanding hedging contracts at June 30, 2009 as compared to Jan 1, 2009.

MAS said the load factor in 2Q was 66%, an improvement from the 56% in 1Q.When compared with 1Q, the group recorded higher operating loss for the quarter of RM420.8 million compared to loss of RM137.9 million in previous quarter mainly due to a lower operating revenue in line with declining trend in global travel and cargo movements resulting from the current economic downturn.

However, the group recorded a profit after tax for the quarter of RM876.2 million from a loss of RM694.8 million in previous quarter after including derivative gain of RM1,340.5 million.

For the first half, net profit was higher at RM180.12 million compared with RM160.04 million a year ago. Revenue was RM5.3 billion versus RM7.52 billion.

The Economic Loss of the group for the quarter and period ended 30 June 2009 is RM882 million (2008: RM52 million loss) and RM1,785 million (2008: RM11 million loss) respectively.

The group recorded economic loss for the quarter and period ended June 30, 2009 after excluding derivative gain and certain non-operational items such as interest income and foreign exchange differences.

[Danny Bhoy]

Guess what matters is that at the end of the day they had 1.3 mill in their pocket,. How they did that ( fuel hedging or other strategies) is irrelevant.

Erm as MH is an airline and not a financial company, I reckon that that their performance in the core airline functions (bums on seats, service delivery etc.) matters more. IMO, it would still be a problem for MH or any airline if their fuel hedging is on the money but they are useless in the airline stuff.

[SQflyergirl]

Guess what matters is that at the end of the day they had 1.3 mill in their pocket,. How they did that ( fuel hedging or other strategies) is irrelevant.

The airline is a going concern. The primary business of the airline is selling rides on airplanes, not trading Jet A-1.

Fuel hedging gains (or losses) are effectively gambling. There is no strong basis for this trend to continue.

What is telling is the operating loss - which shows an underlying weakness in the face of higher load factors offset by poorer yields. This is the important bit.

[scooby5]

Hmmmm, what is the world coming to?

SQ mega quarterly loss, MH record quarterly profit...

And this disgruntled PPS member hasn't even sent MH any spending - YET!!!

And CX back in profit as well, again based on fuel hedging.

[allmotor_2000]

MH offers LAX-TPE for $3000 - $4000 in J and $4000 - $5000 in F. It's always full. SQ needs to learn!

[KevSQ]

Probably the snack meal on the ASEAN route helps as well..

[UMD]

And CX back in profit as well, again based on fuel hedging.

GA also reported profit as well and not on fuel hedging but on its performance on domestic routes. The airline has been expanding like crazy on the Indonesian domestic routes.

Good on MH for now but it needs to recover its pax load soon if it needs to maintain this profit level.

[scooby5]

GA also reported profit as well and not on fuel hedging but on its performance on domestic routes. The airline has been expanding like crazy on the Indonesian domestic routes.

That has a tendancy to happen when one or more of your major competitors close down for "safety" reasons.

[flyguy]

MH technically made operational losses but gain bec of fuel hedging - likewise CX - which brings SQ fuel hedging positions as disastrous as a major part of SQ quarter losses iwere due to hedging losses. But anyway MH still owes PMB Billions which are still outstanding for a long long tme.i

[LukeGT]

The airline is a going concern. The primary business of the airline is selling rides on airplanes, not trading Jet A-1.

[OMISSIS]
What is telling is the operating loss - which shows an underlying weakness in the face of higher load factors offset by poorer yields. This is the important bit.

Completely agree with that!