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RM225M PRE-TAX LOSS FOR MAS
MAY 30, 1998 -
NEW STRAITS TIMES
NATIONAL carrier Malaysian Airline System Bhd (MAS), having
flown into turbulent economic weather, closed its books for
the year ended March 31 1998 in the red with a pre-tax loss of
RM225.38 million.
The results, the first time MAS has recorded a pre-tax loss,
represents a steep 164.5 per cent drop from the RM349.57
million profit registered in 1997.
Of significance was a total RM718.40 million foreign exchange
loss sticking out as a major weighing down factor, even wiping
out a RM618.95 million gain MAS has derived from sales of
aircraft and spare engines.
During the year, MAS entered into sale and leaseback
arrangements for one B777 200, six B737-500, four B737-400
aircrafts and seven spare engines. It also sold one Airbus
A300B. These transactions derived some RM620 million.
Meanwhile, the group registered a translation loss of RM3.49
billion during the year against a gain of RM164.2 million
previously, on revaluation of long-term monetary assets and
liabilities.
However, as the borrowings were mainly to finance purchase of
aircraft in US dollars, the increase in value of the greenback
against the ringgit has resulted in an approximately RM4.8
billion appreciation in the group s aircraft book value.
While MAS group turnover for the year rose 8.7 per cent to
RM7.05 billion from RM6.31 billion the last time, overall weak
operating environment and the regional economic turmoil in
traffic demand and escalation in costs.
All these factors combined to result in the group suffering an
operating loss of RM261.22 million, some 199 per cent at from
the RM263.23 million operating profit MAS group managed last
year.
After making taxation provisions, the MAS group recorded a net
loss of RM256.64 million, translating eventually into a loss
of 33.7 sen per MAS share compared with a 43.8 sen per share
earnings the fast time.
A final tax-exempt dividend of 2 per cent has been recommended
for share- 7 holders.
During the years, MAS also incurred an exchange loss of RM97.5
million on operating transactions provided RM165.2 minion for
doubtful debts and RM48.6 million to handle the Y2K (year 2000
compliance) computer problem.
The troupes net tangible asset backing per share meanwhile
declined to RM2.81 per share from RM6.76 previously.
Meanwhile, at company level, pre-tax loss was booked in at
RM226.3 million compared with lad t year s profit of RM328.2
million.
Despite a 7 per cent growth in revenue to RM6.44 billion, the
company s expenditure rose 27 per cent to RM7.29 billion,
principally due to impact of the weak ringgit, exchange
losses, higher finance charges, depreciation, provision for
doubtful debts and the Y2K programme implementation.
During the year just ended, the company took delivery of six
B777-200, three B747-400, one 8737 aircraft and deterred the
deliveries of three B747-400 aircraft.
The company also recorded an expansion in freighter operations
by 4.3 per cent to B,411.3 million tonne-kilometres while
traffic grew at a higher rate of 4.9 per cent to 3,887.7
million tonne kilometres.
Its overall load factor improved by 0.3 percentage point to
60.6 per cent.
In anticipation of continued overall weak tram demand, MAS
will mean- while continue to review its capacity requirements
and hence the routes serviced.
In its statement, MAS said while outbound traffic from
Malaysia and also domestic travel will drop further if the
economic situation does not improve, the weaker ringgit and
the forthcoming Common-wealth Games to be held in Kuala Lumpur
and some other major international events should encourage
inbound traffic into the country.
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