Friday, 24 May 2013

AirAsia shares down after fall in Q1 profit

Shares in AirAsia Bhd, Southeast Asia’s biggest budget airline by passenger traffic, were down in early trading on Thursday after the company’s quarterly profit fell sharply.

Late on Wednesday, the airline reported a 39.23 per cent drop in first-quarter profit, hurt mainly by higher finance costs and a foreign exchange loss on borrowings.

Kenanga Research said the results were within its expectations and reflects a seasonally slower part of the year. The research house expects better earnings in coming quarters.

"We would expect better earnings from AirAsia in the upcoming quarters due to public holidays, post effect from the recently concluded election and also positive from its associates," it said in a research note on Thursday.

Kenanga downgraded AirAsia to 'market perform' from 'outperform', but raised the target price to RM3.36 per share from RM3.23.

Earlier this month, AirAsia said its passenger numbers in the quarter were up 19 per cent at some 9.8 million.

At 9.31am in Kuala Lumpur, shares in AirAsia were down 0.31 per cent at RM3.23, while the benchmark composite index was up 0.06 per cent at 1785.09.-- Reuters

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