Kenanga foresees challenging time for MAS in Q3 this year
KUALA LUMPUR, Aug 16 – Kenanga Research foresees the third quarter of 2012 to be challenging for Malaysia Airlines (MAS) as third quarters are seasonally weak quarters for airlines, coupled with volatile crude oil prices.
In a statement today, the research firm said MAS has hedged 15 per cent and 35 per cent of its third quarter and fourth quarter fuel consumption at US$103 per barrel.
“However, with crack cost trending upwards, we expect financial year 2012 estimates fuel cost to increase to a range of US$125 to US$135 a barrel,” it added.
Meanwhile, Kenanga said MAS’ second quarter core net loss of RM205 million was within its expectations.
First half 2012 core net loss of RM561 million already made up 45 per cent of our financial year 2012 estimate core net loss forecast of RM1.2 billion but exceeded the consensus’ estimates of RM522 million,” it said.
The first half 2012 core net loss was a 32 per cent improvement versus first half 2011 core net loss of RM824 million, due to reduction of fuel cost by 10 per cent and other operating cost by five per cent, it added.
Nonetheless, Kenanga has maintained an ‘Underperform’ rating on MAS although its financial performance appears to be improving.
“It has too many unknown quantities including largely anticipated volatile fuel environment,” it added. – Bernama