(MENAFN- Gulf Times) Air Arabia PJSC has reported its first full-year loss on record after booking impairments for exposure to private equity firm Abraaj, which is undergoing a court-supervised restructuring. The shares plunged in Dubai.
The full-year loss totalled 609mn dirhams ($166mn), compared with a profit of 631mn dirhams year ago, the Sharjah-based airline said. It booked an impairment of 1.13bn dirhams.
The airline said on Wednesday it will report an accumulated loss of 307mn dirhams related to its exposure to Abraaj. 'While Air Arabia's liquidity status and profitable operations remain intact, the company is taking the accumulated loss 'to serve the best interests of the company and its investors, it said.
The results come amid a regional economic slowdown triggered by a fall in oil prices that has also hit the aviation industry. Dubai's Emirates Airline, the world's largest long-haul carrier, saw its first-half profit plunge 53%.
Air Arabia is embroiled in a legal battle with Arif Naqvi, the former head of Dubai-based private equity firm Abraaj. The airline said last year it had an exposure of $336mn to Abraaj funds. The carrier, which has bases in Morocco, Egypt and the UAE, operates about 50 Airbus A320 aircraft and leases six A321neos. It needs 100 new planes for fleet renewal as well as for growth, and is also considering Boeing aircraft for its next purchase, chief executive officer Adel Ali said last year.
Air Arabia's stocks have declined 28% in the past year, more than the 24% loss for the DFM General Index. Estimated price-to-earnings in the next 12 months fell to 7.9 times, the lowest since August.
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