KUALA LUMPUR: AirAsia X Bhd's (AAX) results for the fourth quarter ended Dec 31 2023 (Q4 2023) came in below Maybank Investment Bank's (Maybank IB) expectations.
The firm slashed its earnings per share (EPS) forecast for the company by 67 per cent and 58 per cent for financial years 2024 (FY24) and FY25.
"While it was recognition of under-accrued fuel expenses from previous quarters that drove the miss, we are also disappointed that AAX cannot yet equity account for Thailand AAX's strong earnings," it said in a note.
Maybank IB downgraded its call on the stock to "hold" with a lower target price of RM1.52 from RM3.40 previously (- 55 per cent).
AAX's core net loss of RM71.5 million brought FY23 core net loss to the same amount, whereas the firm had expected Q4 2023 core net profit of RM64.7 million.
"The shortfall was due to Q4 2023 fuel expense surging 32 per cent QoQ to RM473.2 million, bringing FY23 fuel expense to RM1.31 billion, or 14 per cent more than we expected, and nil contribution from 49 per cent-owned Thai AirAsia X (TAAX) when we expected MYR10.0 million.
" AAX stated the surge in fuel expense was due to recognition of under-accrued fuel expense from previous quarters," it noted.
AAX previously stated that TAAX will contribute from Q4 2023 after its share of previously unrecognised losses zeroed out following its debt rehabilitation plan.
"We also take the opportunity to raise our average jet fuel price assumption to US$105 per barrel (bbl), the current spot price, from US$100/bbl," it added.