KUALA LUMPUR: AirAsia Group Bhd is expected to report another huge loss in its 2021 earnings on prolonged closure of borders and slower-than-expected recovery in tourism.
Affin Hwang Capital said AirAsia had posted record headline net loss of RM2.44 billion in the fourth quarter (Q4) of 2020.
This was due to weak revenue, large impairment charges on right of use assets/receivables, fuel hedging losses and the recognition of deferred tax, partly cushioned by forex, disposal and derivatives fair value gains.
The firm expects AirAsia to report core net loss of RM1.4 billion this year due to the reimplementation of movement control order during the first quarter (Q1) 2021, prolonged closure of borders and longer-than-expected timeframe for the Covid-19 immunisation program.
"We now anticipate AirAsia to report net loss of RM92 million in 2022 earnings (from net profit of RM238 million) due to slower-than-expected recovery in international tourism," it said.
Sequentially, Affin Hwang said AirAsia's Q4 revenue from Malaysia's airline operation had slipped by 68 per cent quarter on quarter to RM113 million.
This was after the reimplementation of movement control orders while the revenue from Indonesia and Philippines had improved by 413 per cent and 60 per cent respectively.
While the results were grossly below expectations, the airline's management made good progress in private placements, Affin Hwang said, adding that AirAsia would have sufficient liquidity for 2021.
The firm maintained a "Sell" call on AirAsia with a higher target price of 75 sen from 50 sen previously.