Malaysia Aviation Group Achieves Inaugural Annual Net Profit

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In 2023, Malaysia Aviation Group (MAG) achieved its first-ever net profit of RM766 million after tax and interest (NIAT). This marked a significant turnaround from a RM344 million loss in 2022. Total revenue grew by 31% to RM13.85 billion, driven by increased passenger traffic and capacity, leading to a net operating profit of RM889 million. MAG attributes its profitability to strong performance in premium segments, expanded international network connectivity, efficient capacity management, partnerships, and improved passenger yield, under the leadership of managing director Datuk Captain Izham Ismail.

“These were achieved despite higher operational and labour costs, weaker ringgit (RM), challenges in supply chains due to increasing costs and uncertain delivery commitments, fuel prices, and elevated interest rates,” he said at MAG’s financial performance briefing today.

As of October 2021, Malaysia Aviation Group (MAG) held a cash balance of RM4.3 billion, without any capital injections from its primary shareholder, Khazanah Nasional Bhd. MAG’s CEO highlighted strategic reinvention, sustaining operations in 2022 and 2023 solely from generated revenues, aiming to maintain financial stability and avoid reliance on shareholders. The restructuring agreement includes a commitment to maintain a minimum cash balance of RM700 million until 2025, ensuring additional shareholder injections if necessary.

The aviation firm noted a year-on-year improvement across its business segments. Malaysia Airlines Bhd (MAB) witnessed a 45% revenue increase compared to the previous year, driven by heightened capacity, robust demand, and international sector focus in the passenger segment. Operating profit surged from RM80 million in 2022 to RM1.099 billion, propelled by increased capacity and robust passenger demand, with airlines collectively achieving over 89% capacity across domestic and international routes. MAB reinstated 86% of pre-pandemic capacity by December 2023, aiming for full recovery by the second quarter of 2024 (2Q2024).

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