Latest news with #capacityexpansion
Yahoo
2 days ago
- Business
- Yahoo
Analysis-Southeast Asia's budget airlines bet on travel demand, despite competition woes
By Lisa Barrington SEOUL (Reuters) -Southeast Asia's biggest budget airlines are pursuing a bruising capacity expansion race despite rising cost pressures that are squeezing profitability and led Qantas Airways to shut down Singapore-based offshoot Jetstar Asia. Low-cost carriers have proliferated in Asia in the past two decades as disposable incomes rise, supported by robust travel demand from Chinese tourists. Demand for air travel in Asia is expected to grow faster than other regions in the next few decades and carriers like Vietnam's VietJet Aviation and Malaysia-headquartered AirAsia are to buy more planes to add to their already large orderbooks as they seek to gain market share. But margins are thinner than in other regions. The International Air Transport Association (IATA), an airline industry body, this year expects Asia-Pacific airlines to make a net profit margin of 1.9%, compared with a global average of 3.7%. Airlines across Asia have largely restored capacity since the pandemic, which has intensified competition, especially for price-sensitive budget travellers, and pulled airfares down from recent high levels. International airfares in Asia dropped 12% in 2024 from 2023, ForwardKeys data shows. AirAsia, the region's largest budget carrier, reported a 9% decline in average airfares in the first quarter as it added capacity and passed savings from lower fuel prices onto its customers. Adding to challenges for airlines, costs such as labour and airport charges are also rising, while a shortage of new planes is driving up leasing and maintenance fees. This shifting landscape prompted Australia's Qantas to announce last week that its loss-making low-cost intra-Asia subsidiary Jetstar Asia would shut down by the end of July after two decades of operations. Jetstar Asia said it had seen "really high cost increases" at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges. "It is a very thin buffer, and with margins this low, any cost increase can impact an airline's viability," said IATA Asia-Pacific Vice President Sheldon Hee, adding that operating costs were escalating in the region. Aviation data firm OAG in a February white paper said Asia-Pacific was the world's most competitive aviation market, with airfares driven down by rapid capacity expansion "perhaps to a point where profits are compromised". "Balancing supply to demand and costs to revenue have never been more critical," the report said of the region's airlines. 'GO BIG OR GO HOME' Southeast Asia has an unusually high concentration of international budget flights. Around two-thirds of international seats within Southeast Asia so far this year were on budget carriers, compared to about one-third of international seats globally, CAPA Centre for Aviation data shows. Qantas took the option to move Jetstar Asia's aircraft to more cost-efficient operations in Australia and New Zealand rather than continue to lose money, analysts say. Budget operators in Southeast Asia were struggling for profits amid fierce competition even before the pandemic and now there is the added factor of higher costs, said Asia-based independent aviation analyst Brendan Sobie. Low-cost carriers offer bargain fares by driving operating costs as low as possible. Large fleets of one aircraft type drive efficiencies of scale. Jetstar Asia was much smaller than local rivals, with only 13 aircraft. As of March 31, Singapore Airlines' budget offshoot Scoot had 53 planes, AirAsia had 225 and VietJet had 117, including its Thai arm. Low-cost Philippine carrier Cebu Pacific had 99. All four are adding more planes to their fleets this year and further into the future. VietJet on Tuesday signed a provisional deal to buy up to another 150 single-aisle Airbus planes at the Paris Airshow, in a move it said was just the beginning as the airline pursues ambitious growth. The deal comes weeks after it ordered 20 A330neo wide-body planes, alongside an outstanding order for 200 Boeing 737 MAX jets. AirAsia, which has an existing orderbook of at least 350 planes, is also in talks to buy 50 to 70 long-range single-aisle jetliners, and 100 regional jets that could allow it to expand to more destinations, its CEO Tony Fernandes said on Wednesday. "At the end of the day, it is go big or go home," said Subhas Menon, director general of the Association of Asia Pacific Airlines. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
2 days ago
- Business
- Reuters
Southeast Asia's budget airlines bet on travel demand, despite competition woes
SEOUL, June 19 (Reuters) - Southeast Asia's biggest budget airlines are pursuing a bruising capacity expansion race despite rising cost pressures that are squeezing profitability and led Qantas Airways ( opens new tab to shut down Singapore-based offshoot Jetstar Asia. Low-cost carriers have proliferated in Asia in the past two decades as disposable incomes rise, supported by robust travel demand from Chinese tourists. Demand for air travel in Asia is expected to grow faster than other regions in the next few decades and carriers like Vietnam's VietJet Aviation ( opens new tab and Malaysia-headquartered AirAsia ( opens new tab are to buy more planes to add to their already large orderbooks as they seek to gain market share. But margins are thinner than in other regions. The International Air Transport Association (IATA), an airline industry body, this year expects Asia-Pacific airlines to make a net profit margin of 1.9%, compared with a global average of 3.7%. Airlines across Asia have largely restored capacity since the pandemic, which has intensified competition, especially for price-sensitive budget travellers, and pulled airfares down from recent high levels. International airfares in Asia dropped 12% in 2024 from 2023, ForwardKeys data shows. AirAsia, the region's largest budget carrier, reported a 9% decline in average airfares in the first quarter as it added capacity and passed savings from lower fuel prices onto its customers. Adding to challenges for airlines, costs such as labour and airport charges are also rising, while a shortage of new planes is driving up leasing and maintenance fees. This shifting landscape prompted Australia's Qantas to announce last week that its loss-making low-cost intra-Asia subsidiary Jetstar Asia would shut down by the end of July after two decades of operations. Jetstar Asia said it had seen "really high cost increases" at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges. "It is a very thin buffer, and with margins this low, any cost increase can impact an airline's viability," said IATA Asia-Pacific Vice President Sheldon Hee, adding that operating costs were escalating in the region. Aviation data firm OAG in a February white paper said Asia-Pacific was the world's most competitive aviation market, with airfares driven down by rapid capacity expansion "perhaps to a point where profits are compromised". "Balancing supply to demand and costs to revenue have never been more critical," the report said of the region's airlines. Southeast Asia has an unusually high concentration of international budget flights. Around two-thirds of international seats within Southeast Asia so far this year were on budget carriers, compared to about one-third of international seats globally, CAPA Centre for Aviation data shows. Qantas took the option to move Jetstar Asia's aircraft to more cost-efficient operations in Australia and New Zealand rather than continue to lose money, analysts say. Budget operators in Southeast Asia were struggling for profits amid fierce competition even before the pandemic and now there is the added factor of higher costs, said Asia-based independent aviation analyst Brendan Sobie. Low-cost carriers offer bargain fares by driving operating costs as low as possible. Large fleets of one aircraft type drive efficiencies of scale. Jetstar Asia was much smaller than local rivals, with only 13 aircraft. As of March 31, Singapore Airlines' ( opens new tab budget offshoot Scoot had 53 planes, AirAsia had 225 and VietJet had 117, including its Thai arm. Low-cost Philippine carrier Cebu Pacific had 99. All four are adding more planes to their fleets this year and further into the future. VietJet on Tuesday signed a provisional deal to buy up to another 150 single-aisle Airbus ( opens new tab planes at the Paris Airshow, in a move it said was just the beginning as the airline pursues ambitious growth. The deal comes weeks after it ordered 20 A330neo wide-body planes, alongside an outstanding order for 200 Boeing (BA.N), opens new tab 737 MAX jets. AirAsia, which has an existing orderbook of at least 350 planes, is also in talks to buy 50 to 70 long-range single-aisle jetliners, and 100 regional jets that could allow it to expand to more destinations, its CEO Tony Fernandes said on Wednesday. "At the end of the day, it is go big or go home," said Subhas Menon, director general of the Association of Asia Pacific Airlines.
Yahoo
2 days ago
- Business
- Yahoo
Analysis-Southeast Asia's budget airlines bet on travel demand, despite competition woes
By Lisa Barrington SEOUL (Reuters) -Southeast Asia's biggest budget airlines are pursuing a bruising capacity expansion race despite rising cost pressures that are squeezing profitability and led Qantas Airways to shut down Singapore-based offshoot Jetstar Asia. Low-cost carriers have proliferated in Asia in the past two decades as disposable incomes rise, supported by robust travel demand from Chinese tourists. Demand for air travel in Asia is expected to grow faster than other regions in the next few decades and carriers like Vietnam's VietJet Aviation and Malaysia-headquartered AirAsia are to buy more planes to add to their already large orderbooks as they seek to gain market share. But margins are thinner than in other regions. The International Air Transport Association (IATA), an airline industry body, this year expects Asia-Pacific airlines to make a net profit margin of 1.9%, compared with a global average of 3.7%. Airlines across Asia have largely restored capacity since the pandemic, which has intensified competition, especially for price-sensitive budget travellers, and pulled airfares down from recent high levels. International airfares in Asia dropped 12% in 2024 from 2023, ForwardKeys data shows. AirAsia, the region's largest budget carrier, reported a 9% decline in average airfares in the first quarter as it added capacity and passed savings from lower fuel prices onto its customers. Adding to challenges for airlines, costs such as labour and airport charges are also rising, while a shortage of new planes is driving up leasing and maintenance fees. This shifting landscape prompted Australia's Qantas to announce last week that its loss-making low-cost intra-Asia subsidiary Jetstar Asia would shut down by the end of July after two decades of operations. Jetstar Asia said it had seen "really high cost increases" at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges. "It is a very thin buffer, and with margins this low, any cost increase can impact an airline's viability," said IATA Asia-Pacific Vice President Sheldon Hee, adding that operating costs were escalating in the region. Aviation data firm OAG in a February white paper said Asia-Pacific was the world's most competitive aviation market, with airfares driven down by rapid capacity expansion "perhaps to a point where profits are compromised". "Balancing supply to demand and costs to revenue have never been more critical," the report said of the region's airlines. 'GO BIG OR GO HOME' Southeast Asia has an unusually high concentration of international budget flights. Around two-thirds of international seats within Southeast Asia so far this year were on budget carriers, compared to about one-third of international seats globally, CAPA Centre for Aviation data shows. Qantas took the option to move Jetstar Asia's aircraft to more cost-efficient operations in Australia and New Zealand rather than continue to lose money, analysts say. Budget operators in Southeast Asia were struggling for profits amid fierce competition even before the pandemic and now there is the added factor of higher costs, said Asia-based independent aviation analyst Brendan Sobie. Low-cost carriers offer bargain fares by driving operating costs as low as possible. Large fleets of one aircraft type drive efficiencies of scale. Jetstar Asia was much smaller than local rivals, with only 13 aircraft. As of March 31, Singapore Airlines' budget offshoot Scoot had 53 planes, AirAsia had 225 and VietJet had 117, including its Thai arm. Low-cost Philippine carrier Cebu Pacific had 99. All four are adding more planes to their fleets this year and further into the future. VietJet on Tuesday signed a provisional deal to buy up to another 150 single-aisle Airbus planes at the Paris Airshow, in a move it said was just the beginning as the airline pursues ambitious growth. The deal comes weeks after it ordered 20 A330neo wide-body planes, alongside an outstanding order for 200 Boeing 737 MAX jets. AirAsia, which has an existing orderbook of at least 350 planes, is also in talks to buy 50 to 70 long-range single-aisle jetliners, and 100 regional jets that could allow it to expand to more destinations, its CEO Tony Fernandes said on Wednesday. "At the end of the day, it is go big or go home," said Subhas Menon, director general of the Association of Asia Pacific Airlines. Sign in to access your portfolio
Yahoo
26-05-2025
- Business
- Yahoo
Cosmic CRF Limited Reports H2 & FY25 Performance Highlights
Best ever performance on all parameters in FY25 Volume more than doubled due to capacity expansion and operational scale-up KOLKATA, India, May 26, 2025 /PRNewswire/ -- Cosmic CRF Limited, (Bloomberg: COSMICCR:IN) (BSE: 543928) has announced its financial results for the Half Year and year ended 31st March 2025. Key Performance Highlights Metric FY25 (Consolidated) FY24 (Standalone) YoY% Sales Volume 55,941 MT 24,657 MT +127 % Avg. Selling Price ₹73,454 / MT ₹102,800 / MT -28.6 % Revenue ₹4,016.3 Mn ₹2,534.8 Mn +58.4%* *Note: FY24 revenue is standalone; FY25 figure is consolidated, including subsidiaries. Sales Volume more than doubled (grew 127% to 55,941 tonnes) due to capacity expansion and operational scale-up. However, a significant fall in average selling price, driven by a ~32% drop in raw material prices, tempered revenue growth. As a result, while production surged, the revenue increase at 58.4% was not proportional to volume. Key Financial Highlights – H2 FY25 (Standalone) H2 FY25 Standalone Performance highlights vs H2FY24 Revenue, EBITDA and PAT grow 10%, 38.1% and 6.5% respectively EBITDA Margin expanded by 211 bps to 10.4% Key Business Highlights – FY25 Capacity Expansion Installed Capacity (Standalone) reached 45,000 MTPA, reflecting a significant 41% increase from 32,000 MTPA in FY24 with the addition of one more 6000 sq. ft shed extension NS Engineering Projects Private Limited Capacity (Subsidiary) has reached installed capacity of 65,000 MT in FY25 in line with our guidance. Achieved production of 15,000 MT subsequent to handover from NCLT in June 2024. Cosmic Springs & Engineering Pvt Ltd (Subsidiary)'s acquisition of Helical and Casnub Springs manufacturing unit, leading to capacity addition of 14400 spring sets per annum Procurement of land completed in May 2025 for setting up of forged components manufacturing unit to add value to our railways integration and supply to the railway wagon builders Order Book Status As of March 31, 2025, the unexecuted order book stands at INR 550 crore, representing 1.8x of FY25 revenue. NEW JVs / ACQUISITIONS for Growth, done during the year Cosmic Springs and Engineers Limited (subsidiary) Entered into Business Transfer Agreement (BTA) for acquisition of Helical and Casnub Springs manufacturing unit with an installed capacity of 14400 spring sets per annum. Cost of acquisition is around Rs. 25 crores - being funded by internal accruals and term loans from bank Acquired land parcel to set up state of art factory to produce forged components for wagons with installed capacity of 7200 MTPA, Capex would be ~45Cr and would be funded through internal accruals and / or term loan from bank. Production expected to start by February 2026 Received confirmation from RP of Amzen transportation ltd to submit final resolution plan by 27th may 2025. Credit rating has been upgraded to BBB stable Cash Flow Commentary – FY25 Key Metrics: Operating Cash Flow (OCF): ₹ (726) million Capital Expenditure (CapEx): ₹ 468.5 million Free Cash Flow (FCF): ₹ (1,194.5) million While Cosmic CRF Ltd. posted a strong net profit of ₹3,082.57 lakhs in FY25, both Operating Cash Flow (OCF) and Free Cash Flow (FCF) were negative due to significant growth investments. The negative OCF reflects temporary working capital buildup and other operational outflows tied to the scale-up of production and infrastructure. Substantial CapEx was incurred for: Capacity expansion Strategic acquisitions Modernization of plants and technology upgrades Looking forward: The newly added capacities and acquisitions are expected to begin contributing to revenues and margins from FY26 onward. Working capital intensity will normalize, and operating leverage will improve. This will lead to a strong rebound in cash generation, with positive OCF and FCF expected as the benefits of investments materialize. Way Forward: Aiming to double sales volume every year over the next 3 years Key Drivers for Future Growth: Continue to grow scale of operations Drive efficiency in capacity utilisation Adopt latest technologies Diversify product offering Developing a strong presence across the country and lay a strong emphasis on sustainability aspects The diversified order book will ensure that the company caters to both the growing sectors – Railways & Infrastructure Plans to acquire another Liquid Metal asset to leverage large steel requirements of the company The company continues to emphasize on operational excellence, product innovation, and long-term value creation for all stakeholders. Commenting on the update, Mr. Aditya Vikram Birla, Chairman & Managing Director of Cosmic CRF Limited, said, "We are pleased to share that FY25 has been a landmark year for Cosmic CRF Limited, marked by our highest-ever revenue, EBITDA, and net profit. Our strategic focus on capacity expansion, operational excellence, and customer-centricity has delivered robust results across key financial and business metrics. Revenue, EBITDA, and PAT grew during H2 and full year FY25, underscoring the strong fundamentals and execution capabilities of our team. During the year, we successfully scaled our standalone installed capacity by 41%, completed key acquisitions, and enhanced the technological and infrastructural backbone of our subsidiaries. These investments are already translating into enhanced output and greater value creation. As we look to the future, we remain resolute in our commitment to doubling our volumes every year over the next five years. This will be driven by continued diversification of product offerings, adoption of advanced manufacturing technologies, and a sharp focus on efficiency and sustainability. Our growing and diversified order book positions us strongly in the fast-evolving Railways and Infrastructure sectors. Despite negative cash flows in FY25, our profitability remains strong. The cash outflows are strategic in nature, aimed at long-term value creation through expansion and integration. With the foundation now laid, we anticipate a significant improvement in free cash flows starting FY26. With our recent credit rating upgrade to BBB (Stable), we believe we are better poised than ever to leverage opportunities and scale new heights. Our mission remains clear – to create enduring value for all stakeholders through innovation, integrity, and impactful growth." About Cosmic CRF Limited Incorporated in 2021, is a leading manufacturer of Cold Rolled Form (CRF), Sheet Piles, and Railway Components for railway wagon manufacturing, including Indian Railways. The company offers Customized Engineering Solutions with wide applications in Irrigation, Building, Automotive, Railway Wagons, and Other Industries. Operating advanced manufacturing facilities in Singur, Howrah & Jangalpur in West Bengal, Cosmic CRF Limited is committed to quality and industry standards. The company boasts a total installed capacity of 135,000 MTPA and an extensive product portfolio For further information, please contact: Cosmic CRF LimitedE: info@ KAPTIFY® ConsultingInvestor Relations | Strategy | ConsultingE: contact@ | M: +91-845 288 Disclaimer This document may contain certain forward-looking statements within the meaning of applicable securities law and regulations. These statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. Such forward–looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in such forward–looking statements as a result of various factors and assumptions which the Company believes to be reasonable in light of its operating experience in recent years. Many factors could cause the actual results, performances, or achievements of the Company to be materially different from any future results, performances, or achievements. Significant factors that could make a difference to the Company's operations include domestic and international economic conditions, changes in government regulations, tax regime and other statutes. The Company does not undertake to revise any forward– looking statement that may be made from time to time by or on behalf of the Company Logo: View original content to download multimedia: Sign in to access your portfolio
Yahoo
24-05-2025
- Business
- Yahoo
AIA Engineering Ltd (BOM:532683) Q4 2025 Earnings Call Highlights: Strategic Expansion Amid ...
Quarterly Sales Volume: 68,741 tonnes. Annual Sales Volume: 255,000 tonnes. Quarterly Revenue: INR 1,141 crore. Annual Revenue: INR 4,200 crore. Quarterly EBITDA: INR 399.52 crore. Annual EBITDA: INR 1,492 crore. Quarterly Profit Before Tax (PBT): INR 363 crore. Quarterly Profit After Tax (PAT): INR 285 crore. Annual Profit After Tax (PAT): INR 1,060 crore. Other Income for the Quarter: INR 92 crore. Current Production Capacity: 460,000 tonnes. Planned Capacity Expansion: 50,000 tonnes each in China and Ghana. CapEx for Maintenance and Projects: INR 120-130 crore. Antidumping Duty in the US: 9.6% including CVD. Brazil Antidumping Duty: Terminated. Warning! GuruFocus has detected 2 Warning Sign with BOM:532683. Release Date: May 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. AIA Engineering Ltd (BOM:532683) achieved a sales volume of 255,000 tonnes for the fiscal year, slightly exceeding their target. Despite a 14% decline in top-line revenue, the company managed to limit profit degrowth to 6.5%, indicating robust margin maintenance. The company reported an EBITDA margin of approximately 34-35%, with core operations maintaining a margin of around 28% after excluding other income. Strategic expansion plans include new plants in China and Ghana, aimed at reducing shipping times and costs, enhancing supply chain efficiency. The company successfully terminated an antidumping duty in Brazil, reflecting positively on their pricing practices and competitive positioning. The US market faces challenges due to a 9.6% antidumping duty, which could impact future sales despite current stability. There is uncertainty in providing volume growth guidance for FY26 due to global volatility and market conditions. The company experienced a 14% decline in top-line revenue compared to the previous year. AIA Engineering Ltd lost some volume to competitors, including a significant customer, partly due to duty structure uncertainties. The company is cautious about the strategic investments in China and Ghana, acknowledging potential geopolitical risks and market acceptance challenges. Q: Can you provide details on the US antidumping duty and its impact on sales? A: The US antidumping duty is 9.16%, including CVD. Despite this, our business continues as customers are paying the extra duty. The US market accounts for less than 8-10% of our total volume, so the impact is not material. We are monitoring the situation and expect more clarity in the next two quarters. - Kunal Shah, Executive Director - Finance Q: What is the status of the large mines you mentioned last quarter that could add significant volume? A: We are actively working on several mines. While we are not providing specific volume guidance for FY26 due to global uncertainties, our medium- to long-term growth strategies remain intact. We are optimistic about achieving our targets but prefer to wait for a quarter or two before giving specific growth targets. - Kunal Shah, Executive Director - Finance Q: How did the mill liner business perform in FY25, and what is the outlook? A: The mill liner business has been performing well, with significant focus and investment. We have increased our stake in an Australian company to 59% and are optimistic about its growth. While we don't share specific volumes, the business is growing and contributes double digits to our total annual volumes. - Kunal Shah, Executive Director - Finance Q: Why is AIA Engineering investing in new plants in China and Ghana? A: The investments aim to address freight and transit time issues, providing better supply chain visibility and cost efficiency. These small, modular plants will help us break into new markets and offer faster, more predictable delivery to customers. The strategic move is to facilitate quicker customer conversion and is not a shift away from India as our primary location. - Kunal Shah, Executive Director - Finance Q: What is the current status of the South American market, particularly Chile? A: South America, especially Chile, is a significant opportunity for us. We are hopeful for a breakthrough soon, as it could be a material game changer. However, due to past macro events, we have been close to securing deals but have not yet crossed the line. We remain optimistic about future developments. - Kunal Shah, Executive Director - Finance For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
