MAS to post modest earnings in 2013

Analysts expect Malaysian Airline System Bhd (MAS), which posted a net loss of RM1.28 billion in its fourth quarter, to record modest earnings in the 2013 financial year. MIDF Research said this was achievable with the cutting of unprofitable routes and collaboration with AirAsia in route rationalisation. "It will be a struggle for MAS to return to profitability. "Nonetheless, the collaboration with AirAsia in route rationalisation will narrow losses and earn modest positive earnings in FY 2013," it said in a research note, adding that the prevailing high fuel cost and weak air travel were major barriers for the airline to record profit. Hence, MIDF maintained its "sell" recommendation with an unchanged target price of RM1.35, pegging its price book value in financial year 2012 to 1.8 times.