Air Arabia 2008Q4 profit AED136m +45%

[sharewadi]

Air Arabia (AIRARABIA) press release (next post) with financial results released. Headline figures are (Q4 figures are my calculations and not confirmed):

2008 FY Net Profit AED 510 million +35.6%
2008 Q4 profit AED 136million +45%
2008 FY turnover AED 2.066 billion +61% (better than Air Arabia revenue forecast of AED 1.5 billion in May 2008)
10% cash dividend proposed

Air Arabia shares fell 2.1% to AED 0.92, turnover was moderate. Will update this post with more summary later.

[edit] Post updated with summary and ratios [/edit]

AIRARABIA 2008 Q4 profit Dh140m +45%, FY 510m +36% 15 Feb 2009

Air Arabia 2008 Q4 report
Air Arabia 2008 annual report

[sharewadi]

Press Release 15 February 2009 (after trading):

Air Arabia records annual net profit of AED 510 million, up 35.6 per cent • Annual turnover rises by 61 per cent to AED 2.066 billion • Board of Directors proposes 10 per cent cash dividend • 3.6 million passengers fly with Air Arabia in 2008 • Passenger average load factor stands at 85 per cent in 2008 Sharjah: Air Arabia PJSC (AIRARABIA), the Middle East and North Africa’s first and largest low-cost carrier (LCC), announced today its financial results for the year 2008. The company achieved a net profit of AED 510 million for the financial year ending December 31, 2008, compared to a net profit of AED 376 million in 2007, an increase of 35.6 per cent. The carrier posted a turnover of AED 2.066 billion in 2008, up 61 per cent compared to AED 1.283 billion in 2007. Passenger average load factor – passengers carried as a proportion of available seats – stood at 85 per cent. Overall, a total of 3.6 million discerning passengers chose to fly with Air Arabia in 2008. This is an increase of 33 per cent compared to 2.7 million passengers in 2007. For the fourth quarter of 2008, Air Arabia posted a net profit of AED 136 million, up 45.4 per cent compared to AED 93.49 million during the fourth quarter of 2007. For the fourth quarter of 2008, the carrier posted a turnover of AED 571 million, up 53.3 per cent compared to AED 372.37 million in same period of 2007. During the fourth quarter of 2008, the airline served 959,067 passengers, an increase of 29 per cent compared to 745,000 passengers during the same period in 2007. Commenting on the results, Sheikh Abdullah Bin Mohammad Al Thani, Chairman of Air Arabia, said: “2008 was a landmark year for Air Arabia, and this is reflected in our robust financial results. Air Arabia has managed to sustain growth and announce record profits in 2008. Therefore, the Board of Directors has proposed distributing a 10 per cent cash dividend to the company’s shareholders, which allows them to share in Air Arabia’s success while maintaining sufficient capital to ensure the implementation of the carrier’s long-term growth strategy.” He added: “2009 will see serious challenges to the worldwide aviation industry, driven by the impact of the global financial crisis and lower levels of consumer confidence. This uncertainty about the future will place additional pressure on the bottom lines and earnings expectations of airlines across the globe. “At Air Arabia, we remain focused on our core objectives and the implementation of our successful business model, building upon our expansion strategy and offering compelling value propositions to our customers. Now more than ever, low-cost carriers are an attractive option for travellers seeking value for money.” In 2008, Air Arabia introduced seven new destinations, and now serves 44 destinations across the Middle East, North Africa, Indian Subcontinent, Eastern Europe and Central Asia. The carrier also announced its new hub in Morocco that is set to commence operations by the end of first quarter of 2009. Air Arabia also announced the launch of a 300-room budget hotel, and introduced new services such as its early check-in procedure and seat selection. The company’s exceptional performance in 2008 was recognised through several industry awards. Air Arabia was named “Low-Cost Carrier of the Year” for the second consecutive year at the Aviation Business Awards 2008. In addition, Air Arabia won the coveted AVEX award for Best Regional Airline at the prestigious AVEX award ceremony in Sharm El Sheikh, Egypt. The carrier won the World Travel Award for Best Low-Cost Carrier in MENA, hailed as the Oscars of the travel industry. Air Arabia was named Best Low-Cost Airline in the Middle East and Africa at the prestigious Budgie Awards, part of the World Low-Cost Airlines Congress, held in London, UK. In May 2008, Air Arabia received the gold award in the best airline category at the MENA Travel Awards 2008.

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[sam111sam]

Best 4Q Results in DFM so far !

Seems that AA benefited more of the drop in Oil rather than impacted by the global slow down...

If you own the shares at todays price of 92 fils, and get 10 fils every year then this would be 11% cash return...(assuming AA will not grow )

Expected a break out for AA after heavy accumulation in the past one week.

[sharewadi]

First post updated with Air Arabia ratio analysis and results summary

AIRARABIA 2008 Q4 profit Dh140m +45%, FY 510m +36% 15 Feb 2009

Air Arabia 2008 Q4 report
Air Arabia 2008 annual report
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[limitup]

great results from airarabia as predicted . airarabia is a very good company with very good fundamentals . its revenues are expanding and growing despite the global economic crisis , its profits are growing like crazy .

airarabia will be one of the new stars of the market and i believe it can be no 1 with in the coming 2 years .

[sharewadi]

There are some discrepancies in previous Air Arabia summaries that came to light when I was reviewing the lastest results (and I haven't gone back over them yet) but the Q4 and FY data in the summary reports and post above should be correct.
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[limitup]

hi sharewadi ,

do you know when will the date of record be for airarabia shares ?

[sharewadi]

No, but the dividend hasn't been approved yet, or even an AGM date set. Any dates I do know should be in the DFM results calendar .
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[sharewadi]

DFM 19 February 2009:

(AIRARABIA) Air Arabia: Announces its AGM to be held on 23/03/2009 including its agenda

Date set as Monday 23 March 2009 for Air Arabia Annual General Meeting (AGM). Agenda not supplied but previous information was 10% cash dividend proposed.
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[jhar]

I wonder that even after a heavy trading day when shares such as DFM and EMAAR went up by more than 10 percent,the shares of AA have barely moved despite a good performance of the company and profits in 2008.Can any one shed light on static nature of this scrip or is there some information that is eluding us.

[bandakok]

I think most investoes think that AA is a long term investment and currently they are looking at a faster turnover.
There is no doubt that AA is way below what its suppose to be.
There has been heavy trading but something or someone keps pulling the shares back, could be to buy cheap ? Ithink next week we will see the reason why it did not go limit up at any time since they declared the financial status.

[sharewadi]

Press Release 23 March 2009:

10 per cent cash dividend approved at Air Arabia Annual General Meeting Assembly approves report of auditors for 2008 financial year, Board of Directors report and company annual accounts Sharjah: Following the conclusion of its second Annual General Meeting (AGM), which was held today in Sharjah, the Board of Director of Air Arabia (AIRARABIA) announced that the assembly approved the distribution of a cash dividend of 10 per cent of the company’s share capital. In the course of the Annual General Meeting, the assembly approved the report of the company’s auditors for the financial year ending December 31, 2008. The assembly also approved the balance sheet and profit and loss accounts of the company for the same period. The first and largest low-cost carrier in the Middle East and North Africa, Air Arabia achieved a net profit of AED 510 million in 2008, an increase of 35.6 per cent compared to AED 376 million in 2007. During the same period, the carrier posted a turnover of AED 2.066 billion, up 61 per cent compared to AED 1.283 billion in 2007. Finally, the assembly discharged the directors and auditors of the company from liability for the financial year ending December 31, 2008, and appointed auditors for the company for the next fiscal year in order to fix their remuneration. “Founded just over five years ago, Air Arabia is now firmly established as one of the region’s true success stories – and we are very pleased to be able to share that success with our shareholders, while still preserving sufficient capital to ensure the implementation our ambitious long-term growth strategy,” said Sheikh Abdullah Bin Mohammad Al Thani, Chairman of Air Arabia. “Thanks to the commitment of our customers, investors and staff, Air Arabia has been able to record truly stellar growth, despite extremely challenging conditions facing the aviation sector worldwide. “We are proud of how well we have adapted to rapidly evolving market conditions so far, and remain fully committed to delivering value-for-money service to our customers and providing them with an increasing range of exciting destinations across the many markets we serve,” he said. “While 2009 will undoubtedly be year of new challenges for the sector as a whole, Air Arabia will continue to seize every opportunity to meet those challenges head on, as we strive to reach even greater heights.” In 2008, the carrier introduced seven new destinations, and currently serves 44 destinations across the Middle East, North Africa, Indian Subcontinent, Eastern Europe and Central Asia. In April 2009, Air Arabia will introduce service to two new destinations: Athens, Greece, and Goa, India. Last year, the carrier announced that it would establish operations from a new hub in Morocco, which is set to commence operations very shortly. Air Arabia also announced last year the launch of a 300-room budget hotel, and introduced new services such as early check-in and pre-flight seat selection.

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[Maha]

If somebody can confirm that what is the dividend entitlement date for AA, as not clear from DFM website.

Is the last day to buy is Tuesday 31 Mar or Thursday 2 April.

[jhar]

Maha
I beleive that the shares should be in your account as on record date which is 2nd April 2009, which effectively means that you should nuy it on or before 31st March 2009.

[sharewadi]

Information I have for Air Arabia dividends is

Tuesday 31 March 2009 - last day to buy Air Arabia shares for dividend eligibility
Wednesday 01 April 2009 - ex-dividend date
Thursday 02 April 2009 - Record Date

DFM 25 March 2009:

(AIRARABIA) Air Arabia: Announces the dates related to its distributions

Air Arabia 25 March 2009:

Shareholders who are registered in the company's sharebook on Thursday 02 April 2009 shall be entitled to receive the dividend distribution of the year ending 31 December 2008

Registration date means record date as far as I know. But yes, sometimes the stockmarkets announce confusing interpretations and dates.
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[brutus455]

If I had AA shares all throughout 2008 and sold them, let's say, 2 weeks ago. Am I entitled to any dividend?

Replies are highly appreciated

Thanks

[jhar]

Unfortunately for you,if you have sold the shares before the record date then you are not entitled to the dividend. I know it sounds unfair that you held the shares all year and the company does not reward you for that. I would personally think that dividend should be paid to shareholders who hold the shares as of 31st December 2008. But I guess there may not be too many takers for such an idea.

[brutus455]

[dov222]

can anyone shed some light on why air arabia shares tanked today, it was looking very strong recently, was it the plane orders?

[jhar]

Today was the Ex-dividend date for AirArabia shares,which effectively means that if youi had bought the shares yesterday, you were enttitled to a dividend of 10 percent which works out to 10 fils which you are not entitled to receive if you bought it today.This is exactly the amount which was built in the shares price until yesterday,and today it fell by 10 fils from 1.06 to 0.96.
Hope it clarifies the issue.

[dov222]

yes, clear now. thank you very much.
there must be a way to adjust this dividend date rule.

[sharewadi]

I don't think it's possible to do it differently.

Share price is adjusted for the effect of bonus shares before trading starts so you don't see a drop in share price, but that makes sense since share capital doesn't change (no actual money is paid out by company).

Cash dividend means share capital does decrease so the market revalues shares to compensate i.e. the share price has a real fall since after the dividend payout, the company is worth less (by the amount that is paid out).
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[Drake]

Anyone know when AA will start mailing out the dividend cheques?

[sharewadi]

Most companies seem to mail out dividend cheques within a month of the dividend record date. Unless Air Arabia has given a different date, I'd assume by 01 May 2009 then ...
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[bandakok]

AA cheque received, not bad return for my investment.
Still i expect some very good new to come out from AA very soon, Q4 was hard on all but still AA did v.good and expect Q1 to top that figure.
I consider AA as very undervalued stock and just matter of time to shoot up fast.