Capital A Berhad · MYX:CAPITALA
Capital A Berhad — AirAsia — Q2 2005 Earnings Presentation
35 slides from Capital A Berhad's earnings presentation, Feb 21, 2005
Slide 1: Now Everyone Can Fly – 2005 Second Quarter Results
“Now Everyone Can Fly” 2005 Second Quarter Results 21stst February 2005
Slide 2: Disclaimer
Disclaimer Now Everyone Can Fly Information contained in our presentation is intended solely for your personal reference and is strictly confidential. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the c
Slide 3: Agenda
Agenda Now Everyone Can Fly 1. Highlight & Events 2. Results Commentary - Second Quarter 2005 3. Cost Management 4. Outlook Question & Answers 2
Slide 4: 1. Highlight & Events
CONFIDENTIAL Now Everyone Can Fly 1. Highlight & Events
Slide 5: Highlights and Events
Highlights and Events Now Everyone Can Fly 5 new routes added in the quarter - entered a new country (Macau) Purchase Indonesian Airline – securing foundation of growth potential in Indonesia Thai-AirAsia (expanding the model outside of Malaysia) 80 Airbus Order Concluded – guarantees contin
Slide 6: AirAsia in Snapshot
AirAsia in Snapshot Now Everyone Can Fly Margin Growth AirAsia Brand People Low Cost 5
Slide 7: Growth, Growth, Growth
Growth, Growth, Growth Now Everyone Can Fly Passengers Flown (‘000) 2,839 2,924 1,481 1,561 1,354 611 291 M ar-2001 Jun-2002 Jun-2003 Jun-2004 1Q-2005 2Q-2005 1H-2005 Market can’t have enough of our low fares - first half passenger flown exceeded full year 2004 passenger carried Passenger number
Slide 8: Growth, Growth, Growth (Thailand statistics)
Growth, Growth, Growth Now Everyone Can Fly Thailand Statistics Q2 -2005 Q1 -2005 Q4 -2004 Average Load factor 77% 84% 74% # Passengers 434,865 369,340 230,831 Average fare (RM) 115 99 99 Cost / ASK (US cents) 2.57 3.14 2.83 RPK (mn) 409 314 182 ASK (mn) 544 371 247 # aircraft (end) 6 4 3 Within a
Slide 9: Growth, Growth, Growth: Indonesia
Growth, Growth, Growth: Indonesia Now Everyone Can Fly Entry to Indonesia way ahead of initial timeline estimates Indonesia potential is enormous, (>200 mill population, 17000 islands, minimal competition) Fleet currently 2 planes, brought from the Malaysian operations Î Indonesia is not compu
Slide 10: How is your Cost / ASK so low?
“How is your Cost / ASK so low?” Now Everyone Can Fly Operating Expenses Cost/ASK Reason (US cents) AA Others* Staff cost 0.29 1.16 Superior productivity & low cost region Fuel and Oil 1.11 1.03 Positive oil hedge benefits Maintenance & Overhaul 0.17 0.38 LT contracts at attractive levels Cost of ai
Slide 11: Cost Management
Cost Management Now Everyone Can Fly Cost / ASK (US cents) 1.3 cents cost reduction since begin operations 3.4 2.9 2.5 2.1 2.1 2002 2003 2004 Q1 2005 Q2 2005 Superior cost containment and more to come – biggest caveat is oil price 10
Slide 12: Cost – where we stack against industry?
Cost – where we stack against industry? Now Everyone Can Fly Source: CSFB CSFB acknowledge AirAsia as the lowest cost airline company 11
Slide 13: People, People, People
People, People, People Now Everyone Can Fly Focus on quality and service is essential to ensure continuous supply of quality staff and avoid slip-up Training Centre aka AirAsia Academy - ensure high quality rollout of staff without major cost exposure - continuous improvement courses to ensure we’
Slide 14: Training – The Bottleneck of Growth
Training – The Bottleneck of Growth Now Everyone Can Fly Cadet Pilot Training School Introduced own Pilot Cadet Training Program in December 2003 Cadet pilots are recruited and enrolled in the Malaysian Flying Academy First group of 17 pilots are expected to graduate in May 2005 Engineer Recru
Slide 15: Simulator Updates
Simulator Updates Now Everyone Can Fly • Scheduled completion: June 26th 2005 • Commencement of Operations : July 1st 2005 (from April) 14
Slide 16: Recruiting the Best People
Recruiting the Best People - adding value to our organization Now Everyone Can Fly Kathleen Tan (Executive Vice President – Commercial) - Specialist in arrears of marketing, communications, brand management. Over 20 years experience in Asia-Pacific region. Senjaya (Chief Executive Officer; Indonesia
Slide 17: But how about your Profit Margins?
But how about your Profit Margins? Now Everyone Can Fly Profitability Air Ryan Easy Virgin Jet South AVERAGE Margin (%) Asia air Jet Blue Blue West EBIT 25 25 5 11 9 9 13.9 Source: AirAsia; Bloomberg; latest company reports Î AirAsia possesses among the best profit margins 16
Slide 18: 2. Second Quarter Results Commentary
CONFIDENTIAL Now Everyone Can Fly 2. Second Quarter Results Commentary
Slide 19: Financial Highlights – Q2 2005
Financial Highlights – Q2 2005 Now Everyone Can Fly Year End : June Q2 2005 Q1 2005 Q2 2004 ∆ ∆ Figures in RM ‘000, unless otherwise stated Q2:Q1(O5) Q2:Q2(04) Revenue 178,633 125,479 106,477 +42% +68% EBITDAR 67,843 32,786 39,631 +107% +71% EBITDA 52,242 20,442 28,448 +156% +84% EBIT 45,713 15,508
Slide 20: Performance Indicator
Performance Indicator Now Everyone Can Fly Figures in % Q2 2005 Q1 2005 Q2 2004 FY 2004 EBITDAR Margin 38 26 37 29 EBIT Margin 26 12 26 16 Net Income Margin 25 11 25 15 Consistent EBITDAR margin improvement Profitability intact despite loses in Thai AirAsia This is in-line with seasonality iss
Slide 21: Balance Sheet
Balance Sheet Now Everyone Can Fly Balance Sheet (RM’ million) 899 Post IPO 150 161 60 3 35 49 46 29 17 -105 (*) -582 Mar-01 Jun-02 Jun-03 Jun-04 Sep-04 Dec-04 Note: (*) For the 15 months ended June 30, 2002 SHR Equity Net Debt IPO proceeds renders a very strong balance sheet 20
Slide 22: Cash Generating Machine
Cash Generating Machine Now Everyone Can Fly Cashflow from Operating Activities (RM’ million) 82 56 -12 29 -19 -3 15 7 Mar-00 Mar-01 Jun-02 Jun-03 Jun-04 Q1-05 Q2-05 (*) Note: (*) For the 15 months ended June 30, 2002 “Normalized CFO” is RM82m. RM75m is paid for aircraft and fuel deposits. Therefore
Slide 23: Operational Statistics
Operational Statistics Now Everyone Can Fly Operational Statistics Q2 -2005 Q1 -2005 ∆ q-o-q Average Load factor 75% 77% # Passengers 1,126,393 984,621 +14% Average fare (RM) 153 122 +25% RPK (mn) 1230 1017 +21% ASK (mn) 1645 1326 +24% Rev/ASK (US cents) 2.86 2.48 +15% Rev/RPK (US cents) 3.82 3.27 +
Slide 24: Operational Statistics
Operational Statistics Now Everyone Can Fly Passenger volumes increased by 14% over preceding quarter Load factor affected by huge inputs of new capacity, markets requires time to consume new capacity ASK increased by 24% as a relation to new aircrafts, increased frequency and addition of new
Slide 25: 3. Cost Management
CONFIDENTIAL Now Everyone Can Fly 3. Cost Management
Slide 26: Operating Expenses
Operating Expenses Now Everyone Can Fly Operating Expenses (RM ‘000) First Half -2005 % Revenue Revenue 304,112 − Staff Cost (33,940) 11.2 − Fuel and Oil (113,613) 37.4 − User & Station Charges (14,645) 4.8 − Maintenance & Overhaul (29,859) 9.8 − Others (11,426) 3.8 EBITDAR 100,632 33.1 - Cost of ai
Slide 27: Cost / ASK – what changed from last year to this year?
Cost / ASK – what changed from last year to this year? Now Everyone Can Fly Q2 2005 : 2.44 vs. Q2 2004 : 2.13 ( 13.0% improvement ) (US cents) Cost per Contribution Reasons ASK (%) Staff cost 0.29 -8.8 Improved productivity Maintenance & Overhaul 0.17 -12.9 Good LT contracts Other costs 0.07 -6.3 Di
Slide 28: Lowest Cost + Lowest Fares = Recipe for Success
What did we say all these time? Now Everyone Can Fly LOWEST COST + LOWEST FARES = RECIPE FOR SUCCESS Î We will keep to our winning ways! 27
Slide 29: 4. Outlook
CONFIDENTIAL Now Everyone Can Fly 4. Outlook
Slide 30: Expanding Ancillary Income
Expanding Ancillary Income Now Everyone Can Fly Go Holiday – AirAsia’s holiday package option - customers increasingly comfortable with Go-Holiday - developing other opportunities Advertising – paying homage to our strong brand AirAsia credit card – partner with RHB and DBS Snack Attack – Ai
Slide 31: Current Trading Conditions and Outlook
Current Trading Conditions and Outlook Now Everyone Can Fly Aircraft delivery schedule under backlog - Availability of attractively priced Boeing 737-300 is increasingly scarce and lease rates have been hardening - demand for B737-300 is rising, particularly from Cargo airlines - delay in aircraft
Slide 32: Trading Conditions & Outlook: Thailand
Trading Conditions & Outlook: Thailand Now Everyone Can Fly Aircraft planned for Thailand deployed to Indonesia & Malaysia - less critical mass but less aircraft Yield and load factors improved, further potential in store - more rationale competition - our brand has achieved dominion status Mo
Slide 33: LCC Terminal Resolution
LCC Terminal Resolution Now Everyone Can Fly Government Announcement : Wednesday 23rd February Î either way, it will be good news for AirAsia Government has listened to us tentatively and gathered inputs, should new terminal be built in KLIA - low cost facilities (potential to save up to 30% of ma
Slide 34: Concluding Remarks
Concluding Remarks Now Everyone Can Fly Very strong quarter (good volume growth, strong average fare, good profit margins) Excellent cost control (despite the oil price boom) Low fares + lowest cost = impressive margins Business outlook reliant to these factors - aircraft delivery schedule -
Slide 35: Thank You – Question & Answer
Thank You – Question & Answer Now Everyone Can Fly 34