KUALA LUMPUR: Continuing concessions given to Malaysia Airlines (MAS) have taken a financial toll on the national airlineâ€™s exclusive in-flight caterer.
Brahimâ€™s Holdings Bhd told Bursa Malaysia on Thursday that its net profit for the first quarter ended March 31 fell 31.6% to RM2.84mil from a year earlier, weighed down by concessions given by 70%-owned subsidiary Brahimâ€™s Airline Catering Sdn Bhd under the settlement agreement inked with MAS Bhd on Feb 26.
The settlement agreement formed part of the MAS Recovery Plan announced by Khazanah Nasional Bhd on Aug 29, 2014.
Meanwhile, Brahimâ€™s revenue for the quarter dropped 7.2% to RM85.72mil compared to RM92.47mil a year ago on the back of lower revenue from food and beverage (F&B) as well as in-flight catering and related services divisions.
Its in-flight catering and related services division revenue for the quarter slipped 7.39% to RM83.20mil from RM89.94mil a year ago.
Similarly, the divisionâ€™s profit also fell 42.17% to RM8.83mil, from 15.27mil a year ago, due to price cutting implemented by MAS under its recovery plan.
Meanwhile, its F&B division revenue dropped 26.92% to RM646,000 resulting from the closure of two non-performing outlets last year.
Brahimâ€™s Holdingsâ€™ logistics and relates services divisionâ€™s revenue for the quarter was up 9.04% to RM1.81mil compared to RM1.66mil a year ago as the warehouse occupancy rate remained high.
Its earnings per share was down to 1.20 sen, from 1.82 sen a year ago. Brahimâ€™s share price had fallen from RM1.29 on Feb 26 (when Brahimâ€™s signed the settlement agreement) to close at 91 sen on Thursday. This was down 1.5 sen from Wednesdayâ€™s close.
Moving forward, Brahimâ€™s expect in-flight catering and related services division to remain challenging due to the implementation of the revised pricing under the new catering agreements, which are under the negotiation process.
Nonetheless, it said, revenue from foreign airlines was expected to improve due to incoming new clients this year.
â€œThe performance of the F&B segment for the first quarter 2015 continued to remain in a loss position but is expected to be narrowed gradually in the coming quarters after implementation of its turnaround plan,â€ it added.
Its logistics segment is expected to contribute positively to its earnings as it has stable business trend in its warehousing services and forwarding business.
Furthermore, as the KL International Airport (KLIA) requires new food concept to attract passengers to its F&B business, Dewina Host is working on traditional and unique concepts to refresh the brands and food varieties at the airport.
This is stipulated under the extended tenancy agreement effective July 2015 to June 2018.
Dewina Host outlets are operational at KLIA 2 with â€œHot Wokâ€ opened in May 2015. The last outlet, â€œToast Boxâ€, is expected to be opened in quarter two 2015, it said.-The Star