KUALA LUMPUR, Malaysia--Malaysian budget airline AirAsia Bhd. (5099.KU) reported Thursday a 30% drop in net profit for the first quarter, mainly dragged down by higher fuel prices, a strong U.S. dollar and staff costs.
Net profit for the January-March period declined to 615.8 million ringgit ($143.2 million) from MYR877.8 million a year ago, according to its financial statement in a stock-exchange filing.
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Revenue, however, rose 31% to MYR2.23 billion during the quarter from MYR1.70 billion a year earlier, driven by an increase in passengers, according to the filing.
AirAsia's revenue and expenses increased significantly on-year due to the consolidation of Indonesia AirAsia and Phillipines AirAsia into its accounts during the quarter.
AirAsia, co-founded and run by Tony Fernandes, is Asia's largest low-cost airline by passenger numbers. The company has grown from a two-plane operation in 2002 to become a billion-dollar airline, and is now looking to launch new airlines in Vietnam, China and Japan.
Many airlines, especially long-haul carriers such as Singapore Airlines, and even AirAsia's associate AirAsia X (5238.KU), have reported weak quarterly earnings.
AirAsia said in notes accompanying its financial statement that its the board remains positive for the prospects of the group in 2017, and is optimistic that the 2017 results may surpass that of 2016.
AirAsia said it is also planning to add 29 new planes this year for a total group fleet of 201 aircraft by end-2017. The airline is also in final negotiations and will complete the sale of Asia Aviation Capital, its leasing arm, very soon, it said.
Shares of AirAsia ended up 6.5% at MYR3.13 per share prior to the earnings release, outperforming the local benchmark stock index's 0.17% rise. Shares of AirAsia have climbed some 28% year-to-date.
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(END) Dow Jones Newswires
May 25, 2017 07:17 ET (11:17 GMT)