Capital A's earnings beat expectations, 2025-2027 forecasts upgraded
KUALA LUMPUR: Capital A Bhd's earnings surpassed Maybank Investment Bank Bhd's (Maybank IB) expectations, driven by stronger-than-anticipated ancillary income, led by baggage fees.
As a result, Maybank IB revised its core earnings forecasts for financial years 2025, 2026 and 2027 upwards by 43 per cent, 27 per cent and 27 per cent respectively.
Capital A reported a core net profit of RM116.8 million for the first quarter of 2025 (1Q25), covering both aviation and non-aviation segments, which made up 33 per cent of Maybank IB's full-year estimate.
Maybank IB said the better-than-expected performance was mainly due to ancillary revenue reaching RM60 per passenger in 1Q25, RM3 higher than initially projected.
"Extrapolated over the 16.2 million passengers carried in 1Q25, we estimated that this had a RM30 million to RM40 million positive impact on core earnings.
"Focusing on non-aviation, it recorded 1Q25 core net profit of RM37.7 million which was within our expectations at 23 per cent of our financial year estimate," it added.
Maybank IB expects stronger earnings for Capital A, supported by a weaker US dollar, with every 1 per cent drop potentially adding around US$2 million (or RM8 million to RM9 million) to pre-tax earnings.
Additionally, lower jet fuel prices, with each US$1 per barrel decrease, could contribute approximately US$15.6 million (or RM66.4 million).
The firm said Capital A's earnings are also expected to benefit from the return to service of the remaining 9 per cent of its fleet by the third quarter of 2025.
The company is aiming to have its practice note 17 (PN17) status lifted by September 2025.
Additionally, it is considering a dual listing in Hong Kong and plans to list its Brand AA in the United States.
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