Malaysia Aviation Group in the black with RM766m net profit for FY23
From left: MAG group CFO Boo Hui Yee, Izham and group chief strategy and transformation Bryan Foong at the results briefing.
KUALA LUMPUR: Malaysia Aviation Group (MAG) is in the black, posting its first-ever net profit after interest and tax of RM766 million for the financial year ended Dec 31, 2023 (FY23), an upswing of close to RM1.1 billion compared with a net loss of RM344 million in FY22.
Revenue increased 31% to RM13.85 billion, compared with RM10.61 billion in FY22.
Group managing director Datuk Captain Izham Ismail said the performance was mainly driven by robust passenger traffic from the premium segment, intensified international network flow, active capacity management, deep partnership collaboration and stronger yield for passenger segment.
“These were achieved despite higher operational and labour costs, weaker ringgit (RM), challenges in supply chains due to increasing costs and uncertain delivery commitments, fuel prices and elevated interest rates,” he told reporters during the group’s financial year results briefing today.
Moreover, he said the group recorded a positive operating profit of RM889 million, which is a 64% improvement from RM540 million in 2022.
“This marks the second consecutive year where we have achieved positive operating profit, which is a testament to our unwavering dedication and strategic management in navigating through challenging times,” said Izham.
Across the group, he said, all business segments registered year-on year improvements.
The total revenue of its main airline, Malaysia Airlines Bhd, improved by 45% compared with the year before, supported by increased capacity, higher demand and focus on the international sector for passenger business segment, with capacity at 90% of 2019 levels.
Malaysia Airlines recorded a significantly higher operating profit at RM1.099 billion from RM80 million in 2022, driven by higher capacity and robust yield amid strong passenger travel demand.
“In terms of capacity, the airlines business collectively achieved more than 89% across domestic and international routes, while Malaysia Airlines has reinstated 86% of pre-pandemic capacity as at end December 2023, with a targeted full recovery expected by the second quarter of 2024.
“Passengers carried by MAB was 52% higher than previous year with load factor at 77% while yield declined by 3% with more capacity deployed.”
In the aviation services segment, its cargo arm, MAB Kargo Sdn Bhd, recorded a lower operating profit, impacted by further softening in freight cargo demand and increased market competition.
MAB Engineering Services Sdn Bhd continued to gain traction with its third party revenue now contributing 24% of its revenue.
AeroDarat Services Sdn Bhd recorded an improvement on its financial performance. The number of flights it handled was 16% higher compared with a year ago.
Izham remarked that 2024 is poised to be the year the group will strive to solidify its credibility. In addition, he said that beyond the flying business, MAG is actively pursuing key investments in aviation services, covering the maintenance, repair and operations, catering, ground handling and cargo.
“These businesses have been identified as the core proponent in supporting the group's diversification strategy and are expected to contribute up to 30% of the group's total topline by 2025. This strategic move is pivotal in mitigating revenue risks, particularly amidst the anticipated softening of air travel yields in the latter part of 2024,” Izham said
