PETALING JAYA : Malaysian Airline System Bhd (MAS), whose first-quarter core net loss of RM356.6 million came in higher than consensus estimates, will not be reviving its subsidiary FlyFirefly Sdn Bhd's jet operations to Sabah and Sarawak anytime soon, the national airline told analysts at a briefing on Tuesday.
This follows the share-swap reversal between MAS and AirAsia on May 2.
MAS took over the jet services of former low-cost unit Firefly between the KL International Airport in Sepang and Sabah and Sarawak last December as part of its wider network rationalisation, leaving Firefly with an all-turboprop fleet. Analysts and aviation experts said the move had benefited rival AirAsia Bhd.
In a report yesterday, OSK Research aviation analyst Ahmad Maghfur Usman said he only expects MAS to be profitable by the financial year ending Dec 31, 2014 (FY14) and post a net profit of RM473 million.
The research firm has widened its core losses expectations for MAS in the current financial year (FY12) to RM775.4 million from RM360 million previously, and FY13 to a loss of RM70 million from its earlier estimate that it will turn around and record a net profit of RM115 million.
"(However,) we expect investor sentiment on MAS to turn positive with the impending resolution of its capital expenditure (capex) funding needs... We think the current low prices offer a good opportunity to start accumulating MAS shares," said Ahmad, upgrading his recommendation on the stock from "sell" to "trading buy" with a higher fair value of RM1.38 from 90 sen.
Kenanga Research also does not expect a strong recovery for MAS in the current financial year even with its new fleet of A380 superjumbos, which are expected to somewhat enhance its revenue base and hence reduce its loss.
Kenanga has raised its loss forecast higher by 13% to RM1.2 billion in FY12 as it factors in the additional finance cost arising from MAS' funding plan. It is maintaining an "underperform" rating on MAS, and lowered its target price to RM1.02 from RM1.05 previously.
Yesterday, MAS share price closed one sen higher at RM1.03 after hitting a high of RM1.08 in active trade with 6.903 million shares done.
On Tuesday, the national airline reported a net loss of RM171.79 million for the first quarter of 2012 and unveiled a funding proposal involving a RM2.5 billion sukuk programme, and aircraft leasing arrangement with the government.
It also plans to raise funding for the remaining capex of some RM6 billion this year to take delivery of 23 new aircraft from commercial sources.
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