Thai Airways Reports Q2 and H1 2024 Results

Dark/Light Mode (12/08/24)  Thai Airways has reported its second quarter results as the company prepares to file a petition to the Central Bankruptcy Court for the cancellation of its business rehabilitation and have the company’s shares resume trading on the Stock Exchange of Thailand within the second quarter of 2025.

In the second quarter of 2024, Thai Airways and its subsidiaries reported a total revenue, excluding one-time transactions, of 43,981 million Baht, 17.7% higher than the same period last year (37,381 million Baht) but 4.3% lower than Q1 2024 due to traditional weak travel demand during  the second quarter of the year.

In Q2 2024, Thai Airways served 3.81 million passengers with an average cabin factor of 73.2%.

Total expenses, excluding one-time transactions, were 38,056 million Baht, 32.1% higher than the previous year mainly due to an increase in variable costs.

Thai Airways' aicraft at BKK. Picture by Steven Howard of TravelNewsAsia.com

Operating profit, before financial costs and excluding one-time transactions, was 5,925 million Baht, compared to 8,576 million Baht profit in Q2 2023.

Thai Airways and its subsidiaries’ financial costs, according to Financial Reporting Standard No. 9 (TFRS 9), was 4,796 million Baht.

Thai Airways and its subsidiaries had one-time items mainly due to loss from foreign exchange and asset impairment resulting total expense of 809 million Baht.

Consequently, the group reported a net profit of 314 million Baht while in the same period last year, a net profit of 2,273 million Baht was reported.

Earnings before interest, tax, depreciation and amortization (EBITDA) after cash paid for aircraft lease payment amounted to 4,401 million Baht.

In the first six months of 2024, Thai Airways and its subsidiaries reported a total revenue, excluding one-time transactions, of 89,936 million Baht, 14% higher than the same period last year, while the total expenses, excluding one-time transactions, was 72,935 million Baht, 27.3% higher than the previous year.

The group reported an H1 2024 operating profit, before financial costs and excluding one-time transactions, of 17,001 million Baht, a 21.3% decrease on the same period in 2023.

Thai Airways and its subsidiaries’ financial costs, according to Financial Reporting Standard No. 9 (TFRS 9), was 9,403 million Baht.

The group had one-time items mainly due to loss from foreign exchange and asset impairment resulting total expense of 4,847 million Baht. Consequently, the group reported a net profit of 2,738 million Baht while in the same period last year, it was reported a net profit of 14,795 million Baht.

Earnings before interest, tax, depreciation and amortization (EBITDA) after cash paid for aircraft lease payment amounted to 18,402 million Baht, higher than the set budget while the net profit is slightly lower than budget due to loss from foreign exchange rate.

As of 30 June 2024, Thai Airways and its subsidiaries had a total of 77 active aircraft. In the first six months of 2024, the average aircraft utilization was 13 hours per day, whilst traffic production (ASK) increased by 15.6%, passenger traffic (RPK) increased by 10.9% and the average cabin factor was 78.1%, a decrease on the previous year's 81.4%. The total number of passengers carried was 7.68 million, an increase of 0.81 million (+11.8%) on the same period last year.

Total assets of Thai Airways and its subsidiaries were 270,526 million Baht, an increase of 31,535 million Baht from 31 December 2023. Total liabilities were 310,956 million Baht, an increase of 28,823 million Baht on 31 December 2023.

Shareholder equity of Thai Airways and its subsidiaries amounted to -40,430 million Baht, a negative decrease on 31 December 2023, by 2,712 million Baht. As of 30 June 2024, cash, cash equivalent and other current financial assets totalled 81,748 million Baht, which is 14,618 million Baht higher than that on 31 December 2023.

During the first six months of 2024, Thai Airways had paid 4,644 million Baht of the total debt in 2024 which is 13,022 million Baht.

In congruent with the business rehabilitation plan, Thai Airways is preparing a registration statement for sale of securities and draft prospectus in preparation for its capital restructuring process which includes (1.1) debt-to-equity mandatory conversion: in proportion of 100 percent of debt for Group 4, Creditor, which includes creditor who is THAI’s major shareholder who is not financial institution namely the Ministry of Finance; in proportion of 24.50 percent of debt for Group 5 Creditor (financial institution creditors assigned to receive residual proceeds from the disposal of aircraft, under the assignment agreements), Group 6, Creditor (unsecured financial institution creditors) and Creditors in Group 18-31 (bondholder creditors), (1.2) the debt-to-equity conversion right (in addition to such 24.50 percent mandatory conversion offered to Creditors in Group 4, 5, 6 and 18-31, and (2) Offering of newly issued shares to its pre-capital restructuring shareholders, THAI’s employees and selected investors by way of private placement, sequentially.

The Company expects that the submission of the registration statement for sale of securities and the draft prospectus for capital restructuring to the Securities and Exchange Commission, Thailand (SEC) and the Stock Exchange of Thailand (SET) will take place within September 2024.

Subsequently, the exercise of debt-to-equity conversion right as well as a notification of the intent to exercise such conversion right are expected to occur within November 2024, and for the offering of newly issued shares, the offering and subscription period for Thai Airways’ pre-capital restructuring shareholders, Thai Airways’ employees and selected investors are expected to take place within December 2024, subject to the preparation of relevant documents by the company and advisors as well as the review process for the filing to become effective by the SEC.

Thai Airways expects to complete the capital restructuring by the end of 2024 in accordance with its business rehabilitation plan with targets to have its shareholders’ equity in the company 2024 fiscal report to be positive, which is one of the key conditions to the fulfillment of the business rehabilitation.

Thai Airways expects to file a petition to the Central Bankruptcy Court for the cancellation of the business rehabilitation and expects its shares to resume trading on the SET in the second quarter of 2025.

The definite timeframe of all processes is subject to the proceedings to be undertaken by the company for the fulfillment of the business rehabilitation and the consideration of the SEC, the SET, the Central Bankruptcy Court and other relevant authorities.

Thai Airways previously submitted a petition to commence the business rehabilitation proceeding to the Central Bankruptcy Court in May 2020, the Cabinet ordered the Ministry of Finance to reduce its shareholding in the company to be lower than 50 percent.

Consequently, Thai Airways was no longer considered a state enterprise which enabled the company to have flexibility in its management, to elevate its competitiveness, and to effectively transform its business and undertake actions under the business rehabilitation plan; for instance: organizational restructuring and downsizing; fleet  and engine commonality; capital efficiencies including costs reduction on personnel, aircraft and engine maintenance.

Ancillary and aviation revenues generated from sales and revenue optimization enabled the company to maximize cash flow and profit. Route and network expansion to enable seamless connectivity also supported the government’s Thailand Tourism Hub strategy.

Thai Airways recently completed the business restructuring and acquired A320 aircraft from Thai Smile Airways resulting the airline’s fleet efficiency, competitiveness enhancement, significant increase of its operational performance, and ability to enhance route and network planning to meet the demand of customers.

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