Sunday, August 22, 2010

Malaysia AirAsia Considering Dividend Payout

24 June 2010

Malaysian budget carrier AirAsia is looking into the possibility of paying dividends, its chief executive said on Thursday.

AirAsia has not had a dividend policy since it was listed on the Malaysian stock exchange in 2004. It previously said it wants to reinvest profits for future capital requirements.

"The board is actively looking at it... we are in a much better position (than last year) to be considering a dividend," Tony Fernandes told reporters after the airline's shareholders meeting.

No decision has been made on the dividend and Fernandes declined to give a timeline or guidance.

AirAsia also plans to offer 30 percent of its Indonesian and Thai units to the public in listings in their respective stock exchanges next year, said Fernandes.

AirAsia, Asia's biggest budget carrier by fleet size, is trading at some of the lowest multiples in the industry as its high debt keeps the stock under pressure, analysts said.

Citigroup estimates that AirAsia is trading at just 6.2 times its expected 2010 earnings, one of the lowest ratios of any listed airline. That is well below its P/E ratio projection of 13.6 for rival Tiger Airways and 11.4 for Virgin Blue.

AirAsia is also one of the most indebted carriers with Morgan Stanley estimating the company's net debt to equity ratio at 249 percent at the end of 2010 and Citigroup predicting 255 percent.

Fernandes said he expects the carrier's gearing to continue falling. He did not elaborate.


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