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THAI Holds Annual General Shareholders’ Meeting 2019

Today (26 April 2019, 13.30 hours), Air Force Convention Hall – Mr. Ekniti Nitithanprapas, Chairman of the Board of Directors, Thai Airways International Public Company Limited (THAI), presided over the Company’s Annual General Shareholders’ Meeting 2019, with the attendance of THAI’s Board of Directors, THAI Management and shareholders, covering the following agenda:

1.      Operating Results 2018

At THAI’s Annual General Shareholders’ Meeting 2019, the operating results for 2018 (January-December 2018) were acknowledged.  THAI and its subsidiaries announced their results for 2018 with total revenue of THB 199,500 million, a 3.9% increase from last year. However, an operating expense was higher than total revenue, thus THAI and its subsidiaries reported net loss of THB 11,569 million.

In 2018, THAI took delivery of five new aircraft while decommissioned two Boeing 737-400 aircraft, resulting total number of 103 aircraft in THAI’s fleet as of December 31, 2018 with an addition of three aircraft compare to the figure as of December 31, 2017. Aircraft utilization was 12.0 hours equaled to the previous year. Production traffic (ASK) increased by 2.9% while passenger traffic (RPK) increased by 1.0%.  Average cabin factor was 77.6% lower than last year’s figure of 79.2%. The total number of passengers carried was 24.3 million, which is a decrease of 1.0% compared to the previous year. This year, THAI made some accounting changes that included changes to the estimated residual value of aircraft and spare engines from 10 percent to 6 percent of the initial cost value, resulting in an increase of THB 3,129 million in depreciation of aircraft and spare engines in 2018.  A review was made on the duration of sold but unused tickets that was previously recognized as revenue after the date of issue was over 24 months and was changed to 15 months, all of which caused passenger revenue in 2018 to increase by THB 1,028 million.

In 2018, THAI and its subsidiaries have been encountering fierce competition, unpredictable high fuel prices which are the highest prices in the past four years. THAI and its subsidiaries’ total revenue were THB 199,500 million, an increase of  THB 7,554 million (3.9%) from different revenue sources including passenger and excess baggage revenue, freight and mail revenue, revenue from other activities, and other income. Total expenses was THB 208,558 million which increased from last year enlarged by THB 19,468 million (10.3%) due to an increase in fuel expenses of THB 9,881 million (19.7%) from the rising average fuel price, which increased significantly by 30.1%. However, fuel hedging performance was better than last year. Non-fuel operating expense enlarged by THB 9,802 million (7.3%) due to the increase of aircraft maintenance and overhaul costs, lease of aircraft and spare parts, and depreciation and amortization expenses. Moreover, both production and passenger traffic increased while finance cost decreased by THB 215 million (4.7%) from cash management and ongoing financial restructure from last year. As a result, THAI and its subsidiaries’ performance for the year 2018 had an operating loss of THB 9,058 million compared to THB 2,856 million profit last year.

This year, THAI and its subsidiaries had a one-time expense that recognized the impairment loss of assets and aircraft, at the amount of THB 3,459 million but had gains on foreign currency exchange at the amount of THB 911 million, mainly from loan revaluation.  Consequently, THAI and its subsidiaries reported a net loss of THB 11,569 million. Loss attributable to owners of the parent amounted to THB 11,625 million.  Loss per share was THB 5.33, while last year’s loss per share was THB 0.97.

However, THAI implemented the transformation plan for 2018 in order to solve the negative retained earnings and enable THAI to generate future sustainable profit. In 2019, THAI plans to generate more aggressive revenue and make various improvements, including modernized and competitive fleet, service enhancements from ground to sky, commercial strategies, digital marketing and ancillary revenues, business expansion such as Maintenance Repair and Overhaul (MRO) at U-Tapao Airport as well as human resource improvement and appropriate financial restructuring.

2.      Distribution of Dividend

At the Annual General Shareholders’ Meeting, shareholders approved to suspend payment of dividend in reflection of the Company’s financial performance in 2018. The suspension of dividend payment is in accordance with the Company’s dividend policy providing that the Company shall distribute “not less than 25 percent of the consolidated net profit before gains or losses on foreign currency exchange and shall also be subject to the future investment plans, necessity and appropriateness.”

3.      Selection of Board of Directors

At the Annual General Shareholders’ Meeting 2018, the following Directors retired by rotation and resignation:

1.      Mr. Distas Hotrakitya
2.      Mr. Rathapol Bhakdibhumi
3.      Mr. Somkiat Sirichatchai
4.      Mr. Sumeth Damrongchaitham
5.      Mr. Kanit Sangsubhan (Resigned on 30 October 2017)

At the Annual General Shareholders’ Meeting, the following three Directors will continue one more term:

1.      Mr. Distas Hotrakitya
2.      Mr. Somkiat Sirichatchai
3.      Mr. Sumeth Damrongchaitham

At the Annual General Shareholders’ Meeting, the following two Directors will replace Directors who retired by rotation and resignation:

1.      Mr. Danucha Pichayanan     to replace Mr. Kanit Sangsubhan
2.      Miss Nitaya Direksathapon          to replace Mr. Rathapol Bhakdibhumi

4.      Consideration and Approval for Transfer of Appropriated Legal Reserve and Premium on Ordinary Share to Compensate the Deficit of the Company

At the Annual General Shareholders’ Meeting, it was agreed that the transfer of the appropriated legal reserve at the amount of THB 2,691,275,568 and the premium on ordinary shares at the amount of THB 25,545,316,308 to compensate the deficit of the Company.

Attending THAI’s Annual General Shareholders Meeting were 897 shareholders, representing 1,663,390,536 shares.

THAI Board of Directors and THAI Management responded to shareholders’ questions. Mr. Ekniti Nitithanprapas, THAI Chairman of the Board of Directors, who presided over the Shareholders’ Meeting, announced that the meeting had come to a close at 19.17 hours. THAI’s Chairman of the Board of Directors thanked the shareholders for their attendance and suggestions that are beneficial to the Company.

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