AirAsia X falls 6.7% on news of woes

by **Cals** Thu 20 Nov 2014, 01:40

AirAsia X falls 6.7% on news of woes

KUALA LUMPUR: AirAsia X Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) fell as much as 6.7% to emerge among the most actively traded stocks as investors reacted to a report by The Edge Financial Daily on the airline’s financial constraints.
The Edge Financial Daily, quoting sources, reported yesterday that the long-haul low-cost carrier faced difficulties in paying staff wages. Describing the unprecedented payment issue as a “temporary setback”, the management of AirAsia X blamed the payment delay to the “late arrival of incoming funds”.
It was also reported that Tan Sri Tony Fernandes, AirAsia Bhd co-founder and group chief executive officer, was planning to play a more active role in AirAsia X.
AirAsia X shares fell to an intraday low of 69.5 sen before rebounding slightly to close down 6.04% or 4.5 sen at 70 sen yesterday, with 43 million shares changing hands. Its market capitalisation stood at RM1.66 billion.
AirAsia X was the fourth most active stock on Bursa Malaysia. For comparison, the FBM KLCI added 0.66% to close at 1,818.38 points.
A remisier told The Edge Financial Daily that the selldown of AirAsia X shares was “inevitable” and that negative sentiment would prevail for the rest of yesterday’s trading.
The remisier said the airline’s losses have been in the spotlight. AirAsia X’s net loss widened to RM128.79 million in the second quarter ended June 30 of financial year 2014 (2QFY14) from a net loss of RM32.3 million a year earlier.
AirAsia X is due to announce its 3QFY14 financials this week.
[You must be registered and logged in to see this image.]“The company has been making losses for the last few quarters. When you have news that AirAsia X is having some kind of financial difficulties, investors will react to it and the selldown is inevitable.
“AirAsia can sell the story of a turnaround for the third quarter and the fact that the founder of AirAsia group is coming back into management. But, what is obvious is that investors are not really buying it and that is why you see the share price falling this morning (yesterday morning),” the remisier said.

This article first appeared in The Edge Financial Daily, on November 19, 2014.