1st quarter 2009 financial resultsir.chartnexus.com/mas/doc/presentation/1q09_presentation.pdf ·...

as at 31st March 2009

12 June 2009

Presentation to Media

Dato‟ Sri Idris Jala (MD/CEO)

Tengku Dato‟ Azmil (ED/CFO)

1st Quarter 2009Financial Results

© Copyright Malaysian Airline System Berhad 2009. Highly Confidential . All rights reserved2

State of the aviation

industry


Overcapacity Fuel Volatility

2009 is the toughest year for airlines

“Quadruple Squeeze” – No one is immune!

H1N1 Flu

Falling

Demand

• 400 aircraft delivery in

Asia Pacific• Most airlines are hedged

at $100 / bbl

• Reduction in fares & fuel

surcharge


Fuel prices

• Fuel prices continue to be volatile

• While fuel prices have fallen, many airlines losing money/see lower profits due

to hedging position

• Over 40 airlines have gone bankrupt and more financially weak airlines are

expected to follow

Overcapacity

• Overcapacity still persist

• A lot of aircraft coming into Asia Pacific, capacity growing faster than demand

Global economic slowdown

• Delaying spending due to economic uncertainties Weaker demand for

discretionary travel

• Lower global air traffic, companies downgrading from business to economy

• Globally, airlines have recorded dips in passenger loads and yield pressures

H1N1 Flu Pandemic

• Heightened level of alert to Phase 5, spreading globally

• A huge threat to airline and air travel recoveryNEW!!!

2009 is the most challenging time for the airline

industry1

3

2

4


IATA – Airline industry outlook remains fragile

• 2009 industry losses doubled to US$9.0 billion

• Asia Pacific airlines hardest hit - US$3.3 billion loss

• Industry revenues to fall by US$80 billion or 15% to US$448 billion

• Passenger traffic expected to contract by 8%

• Cargo to decline by 17%

• Yields to decline 7%

• Industry shrinking - 6% capacity cut

• Growing concern on traffic - swine influenza

• 50 airlines have gone bankrupt in the last 18 months

Source: IATA, June 2009

Carriers in all regions expected to report losses in 2009


Weak trends in freight and travel continues

Source: IATA

International Passenger and Freight Growth


Sharp fall in traffic – downward trend continues

Source: IATA

International Passenger Load Factors


Sharp fall in traffic, Asia Pacific hardest hit!

• 1Q09 yoy passenger traffic fell by 9.1%

• Asia Pacific 1Q09 yoy passenger traffic fell by 12.4%

Passenger Growth by Region

-2.6

-8.4

-5.7

-1.4

3.1

-6.2 -5.6

-10.1

-3.8

0.4

-10.1

-15.6-14.5

-11.6

-5.9

4.7

-13.4

-11.1

-9.1

-3.7

-9.1

-12.0

-13.7-12.8

-10.6

-12.4-11.2

2.7

-20

-16

-12

-8

-4

0

4

8

Africa Asia

Pacific

Europe Latin

America

Middle

East

North

America

Total

% G

row

th in

RP

Ks

Jan-09

Feb-09

Mar-09

YTD-09

Source: IATA


Pressure mounts amidst new capacity

Source: Ascend, IATA


Source: Ascend

The number of aircraft parked continue to

increase (> 2300 aircraft parked in 2009)


Source: Bloomberg

(Net income in RM)31 b

21b

19b

7b6b

4b

627m

3.1b

1.8b

700m

500m

1.5b

400m

330m

266m320m

630m

3.8b

NOT EXHAUSTIVE

244m

4b3.5b

2.2b

2 b

550m

3.2b

State of the Airline Industry - 2008


State of Malaysian Carriers in 2008 –

Profitability impacted by tough operating environment

Source: Company results announcement

120m

1QFY08 2QFY08

40m38m

3QFY08 4QFY08

46m

161m

1QFY08 2QFY08

9m

465m

3QFY08 4QFY08

177m

(Net income in RM)

244m

FY08

+

_

472m

FY08


State of the Airline Industry - 1st Quarter 2009

2.8 b

2.3b

2.3b

1.3b

1.3b1.3b

1.2b1.1b

650m640m

510m

470m

450m

320m300m

21m

42m

21m

98m

1.2b

(Net income in RM)

Source: Bloomberg

NOT EXHAUSTIVE

Early Adoption of

FRS 139


What is FRS 139?

• Financial Reporting Standard 139 is a standard issued

by the Malaysian Accounting Standards Board (MASB)

that establishes the principles for recognising and

measuring financial assets, financial liabilities and

certain contracts to buy or sell non-financial items.

• It is similar to International Accounting Standard IAS39

which are already adopted by many international

airlines.

• FRS 139 is to be made mandatory in Malaysia effective

from 1st January 2010.


Key Rationale for Early Adoption FRS 139

1. Most airlines have hedged fuel at US$100+ per barrel

and are incurring huge MTM losses

2. FRS 139 has been adopted in most countries. Most

airlines (Singapore Airlines, Cathay, Qantas) are on IAS

39 regime and US & European airlines are already on

IAS 39/FAS 133

3. Investors and analysts have expressed reservations on

the comparability of our results to our peers unless our

MTM losses are explicitly stated in line with other

airlines. As such, they have been speculating on what

would have been MAS financial results in an FRS 139

environment.


Many have declared mark-to-market losses in 2008

Sin

ga

po

re A

irli

ne

s

Air

Ch

ina

Cath

ay P

ac

ific

Ch

ina E

as

tern

1.18b

994 m

980 m

908m

629 m

Ch

ina A

irli

ne

s

811 m

Air

Fra

nce

-K

LM

25 m

Sh

an

gh

ai A

irli

ne

s

Hedging

Gain / Loss

(USD)

Asia Pacific airlines fuel hedging mark to market losses for 2008

Source : Bloomberg, Analyst Reports, Centre for Asia Pacific Aviation, internet


Impact from adoption of FRS 139

1. P&L

• MTM losses - Big hit in opening reserves at 1st January 2009

• Effectively, the P&L is “reset” to oil price forward curve as at 1st

January 2009

• MTM impact will change depending on the oil price forward curve

Upward movement will result in MTM gain

Downward movement will result in MTM loss

• The fuel MTM losses are effectively “paper losses” and will only be

realised over the next three years and the quantum realised is

subjected to the actual oil prices

2. Balance Sheet

• Unrealised hedges will be recognised in the Balance Sheet

• No impact on MAS’ healthy cash position, fundamentals remain

intact


FRS 139 – Resetting of MTM Losses

* Simulated for reference only

Balance

Sheet

@ 1/01/09

Profit

& Loss

MTM Losses(based on forward curve

@ 31st March 2009)

(90)

Q1 Q2 Q3 Q4 2010

(10) 0 0 0 0

FRS 139 – Resetting of MTM Losses (Example)

(100)


FRS 139 – Resetting of MTM Losses (Example)

Q1 Q2 Q3 Q4 2010

P&L

(10)

Gain

Loss

MTM Loss

(100)

Balance

Sheet

(90)

USD 60

USD 70

USD 50

- - --

Note : Simulated reference. Other factors influencing derivates valuations are held constant


Oil price volatility continues into 2009

Hedges provide protection from the rising fuel price

30

40

50

60

70

80

1/2

/2009

1/9

/2009

1/1

6/2

009

1/2

3/2

009

1/3

0/2

009

2/6

/2009

2/1

3/2

009

2/2

0/2

009

2/2

7/2

009

3/6

/2009

3/1

3/2

009

3/2

0/2

009

3/2

7/2

009

4/3

/2009

4/1

0/2

009

4/1

7/2

009

4/2

4/2

009

5/1

/2009

5/8

/2009

5/1

5/2

009

5/2

2/2

009

5/2

9/2

009

6/5

/2009

US

$/b

bl

Sin Jet WTI Crude

Source: Bloomberg SinJet and WTI Crude prices from 2 Jan 2009

WTI Crude

SinJet

10 Jun 2009

SinJet US$78/bbl

WTI US$71/bbl

1Apr-10Jun09

SinJet avg

US$64/bbl

Jan-Mar09

SinJet avg

US$55/bbl

Jan-10Jun09

SinJet avg

US$59/bbl

1st Quarter 2009

Financial Highlights


Source: Bloomberg

(Net income in RM)31 b

21b

19b

7b6b

4b

627m

3.1b

1.8b

700m

500m

1.5b

400m

330m

266m320m

630m

3.8b

NOT EXHAUSTIVE

244m

4b3.5b

2.2b

2 b

550m

3.2b

State of the Airline Industry - 2008


State of Malaysian Carriers in 2008 –

Profitability impacted by tough operating environment

Source: Company results announcement

120m

1QFY08 2QFY08

40m38m

3QFY08 4QFY08

46m

161m

1QFY08 2QFY08

9m

465m

3QFY08 4QFY08

177m

(Net income in RM)

244m

FY08

+

_

472m

FY08


1Q09 – impact of challenging operating environment

resulted in demand and revenue decline

Operating loss of RM138 million in 1Q09

Total operating expenditure decreased by 20%

Revenue declined due to the worst global recession in 70 years

Seat factor dropped 13.1 ppts

Pax yield up 4% to 29.5 sen/RPK

In response to the collapse in demand, we have proactively

reduced capacity by 11%

+

+

-

-


Overview of Group Profit & Loss: 1Q09 vs 1Q081Q09

(RM mil)1Q08

(RM mil)

Passenger

Pax Revenue 1,594 2,246

Fuel Surcharge 400 401

Other Revenue 171 156

Cargo

Belly & Freighter 235 392

Fuel Surcharge 65 147

Other Revenue 275 406

Gain on sale of properties - 2

Revenue 2,740 3,750

Expenditure

Fuel 713 1,442

Non-fuel 2,165 2,175

Operating Profit before fin cost & taxes (138) 133

Derivative losses (557) -

Finance costs (17) (4)

Taxation 12 (14)

Operating Profit after fin cost & taxes (700) 115

Share of results of Associated Companies 6 5

Minority Interest (1) (0)

Net Profit after tax (695) 120


1Q09 Passenger*: RASK , Yield , Seat Factor

Including fuel surcharge and admin fees

Capacity ASK

(Mil km)

RPK (Mil km)

Seat Factor (%)

1Q09

9,386

13,565

6,785

12,095

69.2

56.1

-11%

-28%

-13.1ppts

1Q08

Yield

(sen/RPK)

1Q08 1Q09

23.622.9

28.4 29.5+4%

1Q091Q08

1,551

2,220

2,666

1,999

Pax Revenue

(RM mil)-25%

12.816.4

19.7

16.5

RASK

(sen/ASK)

1Q091Q08

*Excluding Firefly and MASwings

-16%


Capacity CTKM

(Mil km)

Filled LTKM

(Mil km)

-45%

Cargo Load

Factor (%)

540

298

-27%

-0.4ppts64.464.0

682

936

603

436

-24% 68.3

89.5

* Include (cargo) fuel surcharge

-24%

1Q08 1Q09

-28%

1Q08 1Q09

1Q08 1Q091Q08 1Q09

1Q09 Cargo: Belly Freighter

43.7

57.6RCTKM*

(sen/CTKM)

Yield*

(sen/LTKM)

Cargo Revenue*

(RM mil)


Costs 1Q09

RM mil

vs 1Q08

RM mil

Variance

Maintenance 320 +38 Engine maintenance for B777

Leasing 495 +34 New lease of 738-800 in 2009, one-off rate reduction

in MASkargo lease rental in 2008

Sales Incentives 23 +10

Advertising 22 +6 Advertising – ELF & All Inclusive Fares campaign

Staff Costs 531 -12

In flight cost 89 -19 Largely decline in pax growth

Commissions 73 -24 Removal and reduction in commission

Fuel 713 -729 Lower avg fuel price from US$114 to US$62 and

lower consumption

Others 612 -43

TOTAL 2,878 -739

Total expenditure decreased 20%,

Fuel costs decreased 50%


1Q09 Fuel Analysis – Reduction in total fuel

cost from lower fuel price and consumption

1Q08 Price Forex 1Q09

RM billion

1,220

Price decreased

by USD52 from

USD114/bbl to

USD62/bbl

1.44

-0.63

0.71

+0.15-0.25

Volume

- 0.73


RM mil 31 Mar 2009 31 Dec 2008

Cash 2,942 3,572

Negotiable Deposit 830 1,045

Other Current Assets 2,132 2,311

Non Current Assets 3,208 3,142

Deferred Tax Assets 20 (0)

Total Assets 9,132 10,070

Long Term Borrowing (668) (986)

Other Liabilities (8,911) (4,887)

Total Liabilities (9,579) (5,873)

Net Assets (447) 4,197

Represented by:

Shareholders’ Equity (459) 4,186

Minority Interests 12 11

Balance Sheet – Healthy Cash Balance

4,3,772 4,617


Impact to Balance Sheet

• Unrealised MTM loss triggers negative equity

• Shareholders’ equity as at 31st March 2009 is -RM459 m.

This means that technically we meet the definition of a

PN17 company

• However operations remains robust and healthy

• Proforma as at 29th May 2009, the shareholders’ equity is

+RM692 m (i.e. no longer meeting the PN17 criteria)

• We have obtained a PN17 waiver from Bursa


Rationale for obtaining PN17 waiver from Bursa

• First time adoption and transition to FRS139

• Negative equity of RM0.46 billion of which -RM3.3 billion is attributed to

MTM

• The fuel MTM losses are effectively “paper losses”. These will only be

realized over time as the hedges are contractual arrangements over

the next three years (2009, 2010, 2011)

• The fuel MTM will fluctuate with oil price movements. It will reduce if

the oil prices move upwards relative to current forward curve. It is such

that on daily basis, MAS could be in and out of PN17.

• MAS liquidity is still strong with cash balance of RM3.8 billion and

minimum immediate obligation.

* projected opening 1/1/2009 with FRS139

** projection made in April 2009


Equity position would be positive at 29 May

forward curve

Balance Sheetas at 31Mar09

(in RM billion)

Proforma

non-FRS139 FRS 139

Proforma

FRS 139with fuel MTM

(29May09)

Share cap & RCPS 1.73 1.73 1.73

Reserves 2.382 (2.19)1 (1.04)3

Equity 4.11 (0.46) 0.69

1 Include unrealised MTM

loss of RM3.33 billion

2 No unrealised MTM in

reserves

3 Unrealised fuel MTM

loss dropped by RM

1.15 billion

PN 17 Threshold = RM0.06 b


MTM Trend: Sensitivity to oil prices

Fuel MTM has improved by RM1.1 billion since 31 Mar 2009

due to upward price movement

Weekly Fuel MTM movement relative to 31/03/2009

0

200

400

600

800

1,000

3 Apr 10 Apr 17 Apr 30 Apr 8 May 15 May 22 May 29 May

RM (Million)

52 52

50 51

5658

61

66

Fuel WTI (USD/ bbl)


Potential hedging gains in Q2 due to oil price

movements

• Since 31st March 2009, oil price has

increased more than 35%

• As of 29th May 2009, MAS could benefit

from hedging gain of RM1.1 billion in

the Q2 P&L

• Consequently, it could mean that MAS Q1

RM695 million will be fully reversed by the

RM1.1 billion

Ceteris paribus (all else being equal)

1.1bgain

RM


If oil price continue to rise higher than 31st

March 2009 (USD 49 / bbl WTI )

• Potential hedging gain of RM 1.1 billion

(as at 29th May 2009)

• Continue to be protected with restructured

hedges

(47% remaining volume hedged @ USD 103/ bbl WTI for 2009)

+

+

Initiatives


Lower

cost

Competitive

fares

Get more customers,

more revenue

Grow network,

build capacity

Profitable

Growth

5 Star

We are on track to achieve profitable growth

but interrupted by current global recession

MH & safety

Skytrax 5-Star award

(2005, 2006, 2007, 2008, 2009)

>34 awards (2005 - 2008)

Savings

2006: RM 665 m

2007: RM 738 m

2008: RM 936 m

Everyday Low Fares

All – Inclusive Fares

MH Value Fares

Weekend Specials

Fuel Surcharge Reduction

Increased internet sales

3rd party MRO

Haj & Charter

Firefly

35x 737-800

6x A380

15x ATR

Codeshares & Interline


Our focus for 2009 is to continue with our

competitive fares initiatives to stimulate demand

Everyday Low Fares MH Value Fares MH Stimulus Package

Internet

Global Travel Fairs (MATF & MATTA)

1 2 3


With Everyday Low Fares & All Inclusive Low Fares

Internet sales improved by 173% in 2008

YoY Sales Comparison

0

20

40

60

80

100

120

140

160

180

Mar

Ap

r

May

Ju

ne

Ju

ly

Au

g

Sep

t

Oct

No

v

Dec

Jan

Feb

Mar

Sale

s in

Millio

n (

MY

R) 2008/09

2007/08-

FARES

MH Value Fares

MATF&

MATTA

Total internet sales

improvement from Jan-Dec08

RM 475 mil

2009


31 m

Jan 08 Jan 09

57 m

+82.5%

42 m

Feb 08 Feb 09

112 m

+164%

44 m

March 08 March 09

99 m

+121%

Significant improvement in internet sales

for Q1 2009 (compared to 2008)

Sales in RM million


MAS has also introduced MH Value Fares

“How would you like to fly today?”

• One of the first airlines in

Asia to launch these fare

options

• It is about providing value

and choice to our

customers

• They will now have full

control of their travel

experience with four new

fare options for economy

class travel.


Aggressively Domestic & Global Sales MAS

connects to hundreds of destinations with 700

sales staff and 1,300 agents in over 30 countries

worldwide

MATTA Travel Fair

March 2009

Malaysia Airlines Travel Fair

February 2009

MH‟s global travel fairs are proven to deliver results

– up to 50% up lift of passengers


Our travel fair has showed 50% - 415%

improvement in passenger and revenue

70.32 m

100 m

2008 2009

92,000

140,000

2008 2009

+52% +42%

4,000

25,000

2008 2009

+525%

3.51 m

18.1 m

2008 2009

+415%

MATF MATTA

Pax Sales (RM) Pax („000) Sales (RM m)


GOOD RESPONSE TO MAS STIMULUS PACKAGE

• Something for everyone!

• 9 deals covering first, business and economy class travel

• Covers 7 deals for

economy class travel,

1 for business and 1

for business and first

class

• Covers domestic,

ASEAN and

international travel

Challenges &

Outlook 2009


48

3 thrusts and 7 KBAs to survive this crisis

Serve Customers

Make Money

Save Money

1. MH initiatives

/ win awards

5. Capacity Cut

6. Cost reduction /

Budget cut 7%

7. Fuel Hedging

Restructuring

2. Dual Pricing &

Aggressive Sales

3. Subsidiary

ancillary /

revenues

4. Strategic Alliances


On track to implement tough cost measures in

2009 to preserve cash – target RM700m – RM1b

Budget cut 7% across the board in 2009

Freeze all recruitment

Freeze all discretionary training and traveling

Stop discretionary expenditure

Prioritise projects

1

2

3

4

5


Strategic Approaches to deal with the crisis

(i.e collapse in demand)

Low High

High

Low

Yield

Seat Factor

1

2

3

• Increase Yield

• Drop Seat FactorDynamic

Pricing

• Drop Yield

• Drop Seat Factor

• Maintain Yield and

accept a reduction

in seat factor

• Drop Yield and

reduce drop in

seat factor

• Tandem increase

in yield and seat

factor (complicated

but needed fine

tuning)

1

2

3


51

We have embarked on a revolutionary “dual

pricing” approach Dual Pricing

Framework

Peak FlightsNon Peak Flights

• Cost plus pricing

Aim to maximise profit

• Accept lower Seat Factor in return for

higher yields

• Competitive pricing

Capture market share

• Go for high Seat Factor (e.g. Everyday Low

Fares, travel fair, aggressive promotion, etc)


Our approach goes down to the route DNA level

MH Pax Business

LHR AMS SYD LAX EWR

J F M DN

MH1 MH2 MH4

1 31

MH16 MH17

1 28 1 31

J F M DN

1 31 1 28 1 31

MH90 MH91

J F M DN

1 31 1 28 1 31

ROUTE

FLIGHT

MONTH

DAY

110,076 P&L


MAS‟ Fundamentals Remain Intact

At current times “Cash is king” - cash & negotiable deposits of

around RM3.8 billion as at Mar’09

We do not take delivery of new jet aircraft until end 2010

To date, we have already proactively cut capacity by 11% in

2009

Cost savings of over RM2 billion over the last 3 years

We already have put in place stringent controls over costs and

investments

MAS continues to be hedged – will continue to be protected from

rising fuel prices

Drive aggressive sales - forward booking remains strong

Reinvent the way we manage inventory and yield


If oil price continue to rise higher than 31st

March 2009 (USD 49 / bbl WTI )

• Potential hedging gain of RM 1.1 billion

(as at 29th May 2009)

• Continue to be protected with restructured

hedges

(47% remaining volume hedged @ USD 103/ bbl WTI for 2009)

+

+

For further queries, please email

[email protected]

Thank You

Back-up


Sales & Bookings Up by 81% and 98%

despite H1N1 Flu

Sales (RM) Bookings („000)

2008 2009 2008 2009

245 m

443 m

207,000

411,000

* *

*January 2009 – 24 May 2009

+81% +98%


Strategic Approaches to deal with the crisis

(i.e collapse in demand)

Low High

High

Low

Yield

Seat Factor

1

2

3

• Increase Yield

• Drop Seat FactorDynamic

Pricing

• Drop Yield

• Drop Seat Factor

• Maintain Yield and

accept a reduction

in seat factor

• Drop Yield and

reduce drop in

seat factor

• Tandem increase

in yield and seat

factor (complicated

but needed fine

tuning)

1

2

3


Sales & Booking improvement of 126% and 158%

despite economy slowdown

Sales (RM) Bookings („000)

2008 2009 2008 2009

119 m

269 m

91,000

236,000

January–March 2009

+126% +158%


1Q09 Loss After Tax – Core net loss of RM108m

RM million

Category 1 Category 2Net Loss

After TaxNet Loss on

Recurring

Basis

*Note:

Category 1 - One off items, e.g., gain on sale of properties, disposal of aircraft

Category 2 - Unusual items occurred during the year due to change in estimates and/or change in accounting policies, revised

depreciation

-108

-695

+564

+23


Peer performance - yoy [option 1]

Source: Company, Research reports estimates

Note: 1) SIA Jan-Mar09

2) Thai Jan-Mar09, seat factor Jan-Feb09

3) CX data 2H08 31/12/08

4) Qantas data 1H09 31/12/08

5) ASK & RPK in million

6) Yield (US cents/RPK)

7) RASK (US cents/ASK)

-5.4%

-14.9%

11.2%

0.4%

-15.2%

-20.3%

5.9%

-2.6%

-5.6% -5.8%

-0.8%

1.2%

-15.3%

-10.7%

-5.5%

-1.8%

-2.3ppt

-5.7ppt

-8.2ppt

-2.4ppt

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

SIA Thai Cathay Qantas

Year

on

Year

Co

mp

ari

so

n (

%)

Ask RPK Yield RASK SF ppt

71.2 76.1 77.627,4

27

19,5

36

7.7 5.5 17,1

60

13,1

60

7.4 5.7

58,5

29

45,3

95

7.2 5.6

63,8

53

50,8

89 8.4 6.7 79.7


Peer performance - yoy [option 2]

-5.4%

-15.2%

-5.6%

-15.3%-14.9%

-20.3%

-5.8%

-10.7%

11.2%

5.9%

-0.8%

-5.5%

0.4%

-2.6%

1.2%

-1.8%

-8.2ppt

-5.7ppt-2.3ppt

-2.4ppt

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Ask RPK Yield RASK SF

Year

on

Year

co

mp

ari

so

n (

%)

SIA Thai Cathay Qantas

71.2 76.1 77.6 79.7

Source: Company, Research reports estimates

Note: 1) SIA Jan-Mar09

2) Thai Jan-Mar09, seat factor Jan-Feb09

3) CX data 2H08 31/12/08

4) Qantas data 1H09 31/12/08

5) ASK & RPK in million

6) Yield (US cents/RPK)

7) RASK (US cents/ASK)


MHCVP Progress (as at end Apr 09)

0%

20%

40%

60%

80%

100%

0

100

200

300

400

500

600

700

800

Cumulative Closure Rate Total projects initiated by end of Mar 2009

Thresho ld ( 70 - 79 )

On Target ( 8 0 - 8 9 )

Exceed ing ( 9 0 - 9 5)

Out st and ing ( 9 6 - 10 0 )

Total (initiatives registered)

Total (due by end Mar 09)

738

707

Completed (by end Mar 09) 614

Delayed 93Cumulative closure rate is at 87%

738

87%

No compromise on quality: Customer Value Proposition


MAS hedging position

• MAS has restructured hedges – in light of volatile fuel

prices this is a more prudent measure than unwinding

hedges

• Oil prices have moved up 25% since 31 March (until 2

June 2009)

• Restructured hedge position 53% @ US$106 WTI

• MAS will still be protected from rising fuel prices which

will translate into write back on MTM unrealised hedging

losses

• MAS effectively pays spot prices on the fuel it consumes

today since all hedging losses has been accounted for.

• Consistent hedge practice ensures stable/longer term

outlook

1st quarter 2009 financial resultsir.chartnexus.com/mas/doc/presentation/1q09_presentation.pdf ·...

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