AOT expected to post losses as Covid continues to depress air travel

Airports of Thailand (AOT) was expected to see a loss in its upcoming earnings report, an executive warned Thursday, as analysts pointed to a sluggish outlook and delay in recovery of the airline industry amid the ongoing pandemic.

Passenger numbers were likely to reach only 47 million for the fiscal year to September 2021, local media Thunhoon reported on Thursday. The figure was down from 72.64 million for the year to September 2020, which saw the Covid-19 pandemic break out in March, according to a November statement by AOT.

From October 2018 to September 2019, the most recent full fiscal year before the pandemic, 142 million passengers passed through the company’s airports, the Thunhoon report said.

The situation, was expected to see an upturn starting in 2022, and to return to pre-pandemic levels in 2023, said AOT senior executive Sirote Duangratana. The company was set to post results for September to December, the first quarter of its current fiscal year, on 15 February.

The number of passengers in December fell to 3.4 million, a drop of 29 per cent year-on-year, and down from November’s 3.8 million, as a result of the latest round of Covid-19 infections, said company President Nitinai Sirismatthakarn.

The most recent figures, for 1-10 January, showed passengers down 84 per cent year-on-year to only 26,000 per day, local media MRG online reported.

AOT expected to see financial loss as a result in the 2021 fiscal year, from October 2020 to September 2021. The company will be able to maintain operations with revenues from domestic flights, but earnings from international flights will continue to be hard hit, the president said.

Sirote said that the company has seen revenues of around 70 billion baht to date during the current fiscal year starting 1 October 2020 from passenger service charges at six airports, with cash on hand available of more than 50 billion baht.

AOT will pursue its investment plan in the east, west and north expansions of Suvarnabhumi airport, worth around 60 billion baht, to enhance capacity for up to 120 million passengers per year. A south expansion plan is still in the pipeline.

Meanwhile, an analyst at Tisco Securities revised the recommendation of AOT from ‘Buy’ to ‘Hold’ given that the second outbreak in Thailand will continue to hamper the industry outlook until the third quarter of the year.

“Despite the possibility of border openings, the Covid-19 spread must be resolved first,” said the analyst. “The market is still monitoring whether AOT will have more assistance measures to help shop owners or not,” the analyst said, referring to business that rent concessions within AOT airports.

The Tisco analyst also slashed the estimation of tourist arrivals in 2021 from 7 million to 5 million and from 26 million to 24 million in 2022. This pressure on the company’s earnings was likely to drive a loss of 9.6 billion baht for the full year, he said.

As of 11.21 am, AOT shares were down 1.24 per cent to 59.50 baht per share with a transaction value of 235.4 million baht for the session.

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