Here, we examine AirAsia's financial performance, taking into account the profit/loss from Thailand AirAsia (TAA) and Indonesia AirAsia (IAA).
Revenues of the jointly-control-entity & associates in 2008:
- TAA: RM 889 million
- IAA: RM 482 million*
- TAA: RM -118 million
- IAA: RM -83 million*
* Besides IAA, AirAsia has a number of other associates. In the sense that their contribution should be quite small, I assumed that the figures of revenue/loss from associates as reported in AirAsia's statment are all derived from IAA.
The net losses stated above are after the adjustment discussed in part-1, i.e. I took out the whole unwinding loss on derivatives (RM 222 million for TAA, RM 207 million for IAA), and then charge back 20% of its amount .
The above losses are not reflected in AirAsia's reported income statement, because the associate's results are consolidated into AirAsia's statement using equity method, and their equity had become zero since few years ago. However, to gauge the economic performance of AirAsia as a grouop, these unregconized losses should be taken into account.
Consolidating the share of loss (48.9%) from these associates, AirAsia's results in 2008 will turn negative -- a net loss of RM 38 million. It should be pointed out that the shared profit/loss from the long-haul AirAsia X had not been included here. However, its contribution in 2008 should be quite small and hence negligible.
Next, we examine AirAsia's performance from the perspective of whole AirAsia Group. Here, we consolidate 100% of TAA & IAA's revenue and results with AirAsia Malaysia. In my opinion, this is the most appropriate measure of AirAsia Group's performance. (see the reasons here.)
The figures after consolidation are:
- Revenue: RM 4.00 billion
- Profit/loss: RM -141 million
- Profit margin: -3.5%
From the Group's perspective, AirAsia was suffering a loss in 2008. I'm a bit disappointed with this performance. However, the prospect of AirAsia in 2009 is very optimistic.
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