KUALA LUMPUR – AirAsia Group Bhd’s shares fell 2.66% in early trade today after reporting a weak financial performance for the year ended December 31, 2020 (FY20).
As at 11.40am, the low-cost carrier shed 3 sen to RM1.10, with 35.63 million units changing hands.
Its net loss widened to RM5.10 billion in FY20 from RM315.81 million in the preceding year, while revenue fell to RM3.14 billion from RM11.86 billion previously amid the unprecedented worldwide travel restrictions due to the Covid-19 pandemic.
Kenanga Research, in a note, said AirAsia’s financial results came in below expectations due to the lower-than-expected volume of passengers carried amid sharply reduced capacity.
However, the research firm raised its target price for the stock to 70 sen per share from 38 sen.
Moving forward, it expects AirAsia to face a tough operating environment in the next two to three quarters, derailed by still widespread travel disruptions.
“However, the availability of vaccines has renewed optimism for air travel returning to normal sooner than expected. The group completed two tranches of private placement in the first quarter of the year, raising RM336 million.”
It said the private placement is part of AirAsia’s plans to raise between RM2 billion and RM2.5 billion in a combination of debt and equity funding to ensure sufficient liquidity for the group.
The airline has also secured commitments from banks for government guarantee loans under the Danajamin Prihatin Guarantee Scheme, and is in the final stages of discussing and finalising the terms.
“In addition, AirAsia has ongoing deliberations with a number of parties for joint ventures and collaborations that may result in additional third-party investments in specific segments of the group’s business,” said Kenanga. – Bernama, March 30, 2021
