Tan Sri Azman Mokhtar: Have you read the AirAsia’s financial statements?

I would like to share this comments which I have received from a reader, Warrior 123. I am surprised that mainstream newspapers like Star and others, have resorted to quoting sources, has painted a very rosy picture of this AirAsia/MAS share swap without any analysis on the income statements of AirAsia. Please read this well thought out piece below. Judge for yourself.  I hope that Tan Datuk Sri Azman Mokhtar, head of Khazanah Nasional Bhd, and the bankers can convince us otherwise with their own analysis based on the AirAsia financial statements.   

1.As of the 1st Quarter of 2011, Air Asia (AA) debts amounted to 7.7 billion with cash balances amounting to 1.7billion.

2. In August 2010. AA announced a deferment of their proposed aircraft purchases but sometime in June 2011 they reversed their decision and proceeded to place an order for an additional 200 new aircrafts at the Paris Air Show.

3. As of 31 March 2011, based on data from their 1st Quarter report, AA’s capital commitments stood at RM 19 billion. With the above announcement, an additional RM 54 billion will be added as Capital Commitments as implied in this article:
http://biz.thestar.com.my/news/story.asp?file=/2011/6/24/business/8966621&sec=business
the proposed CC of roughly 75 billion will be spread over a 15 year period ending 2026. In other words,AA has to ratchet up its earnings to an average of 5 billion per annum to meet its future dues. From 2006 to 2010. AA’s revenue grew by 10 fold from 110 million to roughly 1.1billion, an average growth of RM 200 million per annum.

4. Its cash trove rose 6 fold from approximately 300 million to 1.7 billion but its debts skyrocketed from 1.05 billion in 2006 to 7.7 billion in 2010, an increase of 700%. One gets the ghastly feeling that this is a debt burden that is spiralling out of control.

The schedule for the aircraft delivery is as follows with the Neo being received from 2016 onwards:
2012 = 14
2013 = 13
2014 = 18
2015 = 19
2016 = 19 (4 Neo)
2017 = 14
2018 = 18
2019 = 19
2020 = 20
2021 = 21
2022 = 23
2023 = 24
2024 = 24
2025 = 24
2026 = 9

To compound the issue, the world economy including Asia’s will be into another maelstrom and air travel will invariably be hit:
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/08/02/bloomberg1376-LPCGED6TTDS201-7DB69T4DDVIF7J1IS4SUCOAULO.DTL

and we probably will have a white elephant in NS soon give or take three years and another one of my dire predictions I made in when commenting on AA in 2009 materialises.

Of course AA can cancel orders but contract penalties will be onerous. In any case, TF is betting on the assumption that being a big borrower will shield him from foreclosure as banks will be leery of bearing heavy losses! bUt then a sizeable chunk of those loans are being held by Malaysian banks and in the worst case scenario, the government and the taxpayer will have to pick the tab to avert a financial meltdown cascading down the AA slope.

Warrior 231

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30 thoughts on “Tan Sri Azman Mokhtar: Have you read the AirAsia’s financial statements?

  1. Harpoon

    Thanks for the posting YB Wee. Remember how an old man in the US marketing his ‘debt’ scheme which ultimately became “sub-prime” loan crisis? There is similarities in the smart marketing tools and perceptions AND symptoms.

    Reply
  2. Hj Azman AAziz

    YB, most of the nation mainstream newspapers do not print negative news on AA as they do not want to offend TF. I guess TF must have pledged millions on advertising and so forth in their newspaper. I remember AA flight incident in Kuching shown on TV3 but none of of media reported it. Funny but its true, this is BolehLand. They keep harping on transparency and yet, the same media leaders acting differently.

    Reply
  3. Dshscgsdssd

    What a poor analysis. What their net asset or liability position? Why only mention cash and liability? Please lah – you can fool the average dumb ass but not everyone . Once again your shitty politics come into play. Asshole !f

    Reply
  4. The crony

    dshsgsdssd

    What asset and liabilities? Analyse it for us like what Warrior 123 analysed the AirAsia’s financial statements for us. Don’t just get upset with something that you cannot defend on the facts.you may not like it if you are with Tony Fernandes or the Tingkat 4 boys. But you can not go against facts.

    Sorry please try harder to defend next time.

    Reply
  5. Accountant Anonymous

    Well said about AA. For a long time i have been amazed with AA’s rise that has not resulted in shareholders dividends or bonuses. The only thing is the rise in its share prices but that too perhaps by fund managers. Thanks.

    Reply
  6. Khinzirnah

    After AirAsia/MAS deal, we can expect Proton/Naza merger SOON. Remember what happened to Sime Darby/Guthrie/Golden Hope? I hope CIMB is not the advisor for AirAsia/MAS deal.

    Reply
  7. Pingback: Taxpayers’ money used to enrich AirAsia? | Jebat Must Die

  8. Anonymous

    anonymous

    What share swap? it is just name used to pull wool over the eyes of the rakyat. Tan Sri Azman sudahlah with the 4th floor nonsense. 4th floor is has been refurbished with the old fixtures and fitting being discarded into the long kang except the SIL.

    We know that bodohwi is the advisor of MAS. But Tan Sri Azman should look after the best interest of MAS for the nation. I know that TF is a good friend of you but you must still look after the interest of our national carrier.

    Reply
  9. Anonymous

    Sub Prime Loans Package sold to European Banks comprised

    80% Sub prime Loans
    15% ok loans
    5% prime loans to prime clients
    Ratinf Agency give AAA rating for package and yther you have it. The Europens flocked to buy it and now folcking to get out no way.

    In golf if you want win competitions sand – bag you handicap and get MGA to sanction it.

    Reply
  10. Dydhd

    The crony – my point is warriors analysis is rubbish. Maybe once you get your head out of his ass, you can see the same. Till then, ta

    Reply
  11. Just a con job

    Hello Tan Sri Azman Mokhtar, AA got 32 destinations approved by Ministry of Transport. Flew 16 and then abandoned 3. left with 13 destinations. Tan Sri, Tan Sri, please for heaven sake look at the basic arithmetic here, how the AA utilised its 200 aribus, which delivery will start early next year.

    Are you that stupid, Tan Sri? If you can get this arithmetic right then please go back to school.

    Reply
  12. Brainless Khazanah

    Khazanah is a real joke. Do we need Khazanah to hand over MAS management to AirAsia?

    Well, thank you Tan Sri Azman for a job well in what you are doing for the country in this share swap. You are just a great guy. Malaysia needs people like you badly so that we can rewrite history. Why don’t you change our national airline name to AirAsia so that the 4th floor boy will be happy as well as well as the MAS’s chairman, Ahmad Badawi.

    Reply
  13. 1 RAKYAT

    Very true, YB. Tony is biting more than he can chew.
    There are few jokes going around time about TF.

    1. TF is so cunning that he can sell fridge to eskimos, Disneyland to Walt Disney, Virgins to Richard Branson and MAS to Khazanah.

    2. A former airline boss appproached TF at a travel fair and said “TF, I respect you so much, you sold tickets at RM 1 and yet you made so much profit”

    Reply
  14. haneefa

    YB, I have to disagree with you on this one. For the average malaysians, AA is a god sent airline. My family and I have benefited tremendously from AA’s low prices. We have taking holiday trips that we would never have taken had AA not been around. So from this standpoint, AA must survive and grow. Also AA has given KLIA an opportunity to become a hub of some sort (maybe LCC hub). We have been trying for many years to upstage Changi and Bangkok but not very successful. But we also do not want MAS to fail. If AA continue to grow and compete with MAS, there will be only one outcome, MAS will loose and continue to burn taxpayer money. So, with all its imperfections and risk, I think this deal is a net benefit to the country.

    Reply
  15. anon

    najib ini bulan puasa tapi bukan untuk tidor laa….

    please do the right thing sack the tan taik azman mokhtar and his goon takkan nak tunggu sampai AA dan MAS colapse baru nak sack depa nie?

    itu fernandez is a vulture la….dia bagi gula-gula sikit lu dah ambil apa nie?

    tengok la track rekod die hutang, hutang and hutang!

    tengok pulak F1 yang dia sertai? among the last…..tak nampak lagi ke?

    apa ke bodoh nya tan taik mokhtar nie kata AA and MAS is a separate entity?
    masalah nya si fernandez the vulture sudah cucuk jarum dia, kalau jarum tu kotor habis lah berjangkit kat orang lain boleh nampak tak najib?

    tanya lim kit siang? serupa juga lah dia merayu pak lah kekal jadi PM! this guy is not an honest guy syarikat anak beranak tak nampak ke?dia tunggu je peluang nie….

    apa lah nak jadi dengan najib nie? kalau tak dr mahathir backing die tak kan aku support najib nie….

    ular lagi baik.

    Reply
  16. Anonymous

    it’s all about..”best friends talking”….thinking that they can develop the world with people money…..

    Reply
  17. nupekan

    Idris Jala, the once who steered MAS to profitable…by selling MAS owned properties…i can do that even better….

    also…the who’s who in Malaysian GLC and sub GLC and Khazanah and Malaysian owned companies..are the same millionaires who did nothing except making proposal to the goverment to enrich themselves and their goons..

    this inner circle of goons…makes money by sweet talking the politician who failed their maths..

    funny funny funny…

    Reply
  18. Hantu Gigi Jaran

    Nazir is the real beneficiary! Tons of advisory fees from GLCs. TSAM should take responsibility being the advisor of MAS and later the policy maker. His policy sucks and didn’t work. Resign!

    Reply
  19. thong

    how misleading when you mention a company debt without menting her repayment ability.for your information AA debt ratio has reduced from 2.6 in2007 to 1.5 in march 2011.what does it mean ?It simply maen the AA is making more and moe money and reduced it debt ratio,if you look at the financial report AA is generating more than 300m (net profit plus the amount of depreciatio) for the last few quaters,it is about 1,2b a year, FOR 2Q 2011 MIDF estimate AA net profit will up 36% qtq,that is another 300m to 400m cash to AA, now you konow 7b debt to AA is not a big deal.Further more the additional planes going to deliver is not for AA alone,is for AA Indonesia, AA Thai,AA philippine ,AAX and AA Japan ,not for AA alone,further more AA Thai,AA Indonesia and AA X going for IPO in 2q 2011, these will generate millions of RM to AA .As a MP your word carry some weight,so we espect you will do more reseach before giving comment.

    Reply
  20. fer

    As a MP, you just showed you are more clueless than your readers. Thanks, you have just lost my vote. Who need a brainless MP whose main aim is to stir up negative sentiments? I am surprised you would write something as stupid as this and expect us to believe it. IF you cant understand how to read financial statements, please ask someone to explain to you before PUBLISHING your comments.

    AA is buying planes for whole of AA group, not just Malaysia. You should be proud that we actually have a Malaysian like Tan Sri Tony who is famous all over the world….while you are still a toad under a coconut shell.

    Reply
    1. weechookeong Post author

      Of course, I am proud to have a Malaysian like Tan Sri Tony Fernandes, who is famous throughout the world and was able to “buy” and who head AIrAsia organisation, known to have owed more than RM125 million airport tax since AirAsia’s inception and when being pressured. WHen pressured to settled the airport tax through Parliament, AirAsia was able to get a huge discount of more than 30%. Instead of refunding them back to the passengers, AirAisa treated it as theirs.

      Now he was able to ordered MAB to scrap the aerobridges for KLIA2. Now share swap. Khazanah may have to also buy 10% shares of AirAsia X sdn bhd, a private company owned by The famous Tan Sri and his friends. Soon we will hear more.

      For all these, not only me should be proud of Tan Sri Tony but all Malaysians.

      Thank you

      wee choo keong

      Reply
  21. Average Joe

    @ thong

    above all, the weakest link in your comment is the word “will”. what if all those prospective gains you mentioned above don’t materialise? then HOW are you going to save AirAsia and of course, MAS who is forced to share AirAsia’s liabilities?

    Reply
  22. TONTO

    Well done, YB Wee,
    Give them hell, you have mine and my extended family votes.
    I am from Aviation background and you surely know more than most of the people in the industry.

    To your critics, I have only one question.
    Do they know how much does one A320 and A330 cost and the ROI?

    Sigh, if only most of the YBs are like you, Malaysia could be a corrupt free country.

    TONTO

    Reply
  23. kcaj

    YB Wee, don’t mind the ridicule, rude or otherwise. We need an inquiry NOW to circumvent an implosion so catastrophic, which will blow us Malaysians back to the Ice Ages. AK+MH are merely 2 public transport companies, one “private” & the other govt controlled, in an industry so crucial to the future of the country. If they both fail, I dread to think of their impact to the way we travel for work or leisure and not forgetting the national civil aviation infrastructure & the industries that are dependent upon it. A clear well defined path is required through a long-term public transport policy. The way things are, I cannot see this vis-a-vis all the huge privatized transport related infra projects. Civil aviation differs from land transport on one very crucial factor, quantum of costs. So, haphazard decisions by policy makers won’t do just like distributing bus permits. Ini tak boleh lah!

    Reply
  24. MAS Staff

    Yeah…YB, you also have my vote!! What AA owes is our rakyat’s money!!! The chines classic saying “Ka Na Sai” that Tony..F…

    Reply

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