Malaysia Airlines announces Third Quarter Results 2002/03

Malaysian Airline System Berhad today announced an operating profit of RM32.3 million for the third quarter ended 31 December 2002, a positive development from a loss of RM323.8 million for the same quarter last year. This is the second consecutive quarter to register profit providing continued  momentum and improving on the second quarter ended 30 September 2002 of RM8.9 million.

During the quarter the Group also recorded RM77.1 million gain from the sale of one B747-400C aircraft. The Group's ongoing turnaround saw the  successful completion of the Restructuring Programme on the 6th November 2002 which realized RM229.4 million, mainly due to the crystallization of deferred income and gain from sale and leaseback of certain aircraft earlier, under finance lease arrangements.

The profit before tax for the quarter of RM333.6 million recorded notable improvement from a loss of RM324.9 million in the same quarter last year and a profit of RM5.0 million in the previous quarter.

Passenger traffic rose 16.7% year on year for the quarter to 9,368 million passenger kilometers on a capacity increase of 4.9%. Similarly, cargo traffic increased 26.5% year on year for the same period to 587 million load tonne  kilometers, against a capacity increase of 2%. Consequently, passenger and cargo load factors averaged 66.9% and 72.5% respectively for the quarter, up 6.7 and 14.2 percentage points respectively.

Higher operating revenue by 9.7% (or RM190.6 million) coupled with lower expenditure by 7.8% (or RM183.5 million) resulted in the improved operating profit over the same quarter last year. The lower cost came from fuel, depreciation, aircraft maintenance and finance charges.

Malaysia Airlines passenger traffic performance has improved specifically in the Orient, Asia and ASEAN routes. The cargo sector led the way with  consistent improvement in each quarter, whilst the third quarter results surpassed the cumulative figures for the previous two quarters in terms of profit. This was due to closer monitoring of cargo demand and the ability to  exploit transshipment potential which grew by 42% during the first nine months. The improved cargo handling capability at KLIA has begun to realize the potential of the airport as a cargo hub in the region.

For the first time since 1998, the cumulative pre-tax position as at 31 December 2002 was a profit of RM261.0 million. For comparison purposes,  last year's cumulative position as at 31 December 2001 was a loss of RM882.3 million.

Malaysia Airlines' managing director Dato' Md Nor Yusof said, "The implementation of Restructuring is in place and the Turnaround Programme is showing positive results. We are particularly pleased with the  results from MASKargo which started generating profit from the beginning of the current financial year, with a very creditable third quarter, truly going beyond expectations. On this premise, the Management strongly believes  that the recovery of the company will gain momentum. We are cogniscant of the danger of the outbreak of war and the likely impact on our industry. While we have taken appropriate steps to absorb the short term impact, we  cannot predict the outcome of a protracted war. We, however, remain committed to our business plan which is predicated on growth."