MAS Set for Third Quarterly Profit in a Row

By Anna Maria Samsudin

NATIONAL carrier Malaysian Airline System Bhd (MAS) could post its third consecutive quarterly profit this month as it rakes in improved revenue and cuts cost further, analysts say.

They are optimistic that the carrier would post net profit for the rest of the year as it shows improvements under its Business Turnaround Plan (BTP).

“Under the BTP, the airline has managed to make so many improvements in all aspects of the operations, be it in terms of efficiency enhancement as well as cost reduction,” said TA Securities analyst Rosnani Rasul.

The analysts did not provide quarterly forecasts. MAS made a net loss of RM321 million in the quarter to March 31 2006.

State-owned MAS has set a target to report its first full-year quarterly profit in three years under a new management headed by Idris Jala.

Turning in a profit for the period would further reinforce the carrier’s impressive showing as the first and third quarter are normally considered as the “low season” in the industry, Rosnani said.

An analyst from a foreign stockbroking firm said first-quarter numbers would be driven by yield management, or the process of managing revenue, and the realignment of its flight network.

The analyst cited the firm’s new price structure, which has already resulted in strong revenue growth.

“MAS earnings are highly leveraged on yield, and we think that the new pricing system and network capacity realignment provide further scope for yield enhancement,” the foreign analyst said.

MAS has been in the black for the two preceding quarters, where it reported net profits of RM240 million and RM122.04 million in its third and fourth quarter respectively last year.

For the full year last year, the national carrier posted a net loss of RM133.74 million, almost 80 per cent lower than its initial target of a RM620 million net loss.

Under its BTP, MAS aims to make a full-year profit by the financial year ending December 2007 with an estimated profit of RM50 million. It then expects to make a RM500 million net profit in 2008.

However, analysts expect the airline to make a net profit of RM518.99 million this year. This is due to jump 69 per cent to RM878.35 million in 2008.

Shares of MAS closed three per cent up to RM5.70 last Friday.

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