Malaysia Airlines further into red, doubling losses in year to March
Troubled Malaysia Airlines announced today it has dipped further into the red, saying it net loss for the year to March doubled to RM835.562 million.
The flag carrier attributed its fifth straight year of losses to new accounting policies and the severe impact on travel following the Sept 11 terror attacks in the United States, but said its restructuring plan remained on track.
Sales dipped five percent to RM8.5 billion, down from RM8.956 billion the previous financial year, it said in a statement to the stock exchange.
Malaysia Airlines' operating profit fell 47 percent to RM667.127 million, compared with RM1.259 billion previously, while its pre-tax loss surged to RM846.492 million from RM386.636 million.
Its loss per share jumped to RM1.085 sen, up from 0.54 sen previously.
The airline said the net loss of RM417.428 million in the 2001 financial year was pared by higher gains from aircraft disposals totalling RM235.8 million compared with RM21 million this year, and income from an insurance claim on damaged aircraft worth RM223.2 million.
"Adjusted for the aforesaid, the operating loss for the year ended 31 March 2001 would be RM855.4 million, compared to the operating loss of RM835.6 million for the year ended 31 March 2002," it said.
Weak environment
The airline also blamed the weak operating environment following the downturn in the US and Japan, as well as the "severe negative impact on traffic" after the Sept 11 tragedy.
"The contraction in global demand for air travel resulted in heightened competition and downward pressure on fares," it said, adding the ringgit's weakening against some foreign currencies added to its woes.
It said its efforts to contain costs and improve efficiency helped to mitigate the adverse operating environment.
The carrier, struggling under some RM10 billion in debt, embarked on a restructuring plan last year to return to the black by 2004 after the government renationalised it in February.
In January, it announced it would be delisted from the stock exchange and that it would split its domestic and international operations as part of restructuring plans.
The airline's listing status would be transferred to a new subsidiary, which would take over its international passenger and cargo services.
Malaysia Airlines shares reversed losses to close up 0.06 at RM4.18 ringgit Wednesday.
On schedule
Managing director Mohamad Nor Yusof told reporters the carrier's revamp was on schedule.
"Our recapitalisation and corporate restructurings are in progress. We expect them to be on schedule," he said, adding details of the restructuring plan would be announced in early July.
Asked if the airline was still seeking a foreign strategic partner, he said: "We are not seriously looking at it now. We are busy at housekeeping."
On future strategy, Mohamad Nor said Malaysia Airlines was "preparing for better coverage" in China, India and the Middle East due to changing travel patterns.
He said the carrier was still talking to a consortium of local and foreign companies to sell its catering arm.
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