Accounting adjustment saddles THAI with THB26.9 bn loss in fiscal 2024

A one-time accounting adjustment has resulted in Thai Airways International reporting a huge net loss of 26.901 billion baht for fiscal year 2024, a stark contrast to the previous year’s profit of 28.123 billion baht. 

The national carrier attributes the loss to an accounting adjustment stemming from its debt restructuring, assuring stakeholders that it will not impede the airline’s exit from its rehabilitation plan.

The loss reported on Wednesday translates to a loss of 6.26 baht per share, down from a profit of 12.87 baht per share in 2023. The company’s earnings before interest, tax, depreciation and amortisation, after accounting for aircraft lease obligations, stood at 41.839 billion baht, down 2.4% from the previous year.

The loss was the result of a one-off expense of 49.260 billion baht, primarily due to debt restructuring losses amounting to approximately 45.271 billion baht. 

This arose from the debt-to-equity conversion as part of the airline’s rehabilitation plan, a non-recurring event unrelated to its core operational activities. 
 

Additional losses were attributed to asset impairment, foreign exchange fluctuations, and inventory adjustments, partially offset by revenue adjustments from expired tickets.

Despite the headline loss, Thai Airways reported an increase in total revenue (excluding one-off items) to 187.989 billion baht, up 16.7%. 

This growth was driven by a 16.2% rise in transportation revenue – passenger revenue increased by 16.7% and freight and mail revenue by 11.79%. 

The airline also saw increases in other business revenue and other income, reflecting the expansion of flight frequencies and routes to meet growing passenger demand.

Total expenses (excluding one-off items) also rose by 21.2%, in line with increased operational activity. Factors contributing to this included higher aircraft maintenance costs, increased aviation service fees, and increased sales and advertising expenses.

As a result, the airline’s operating profit before finance costs (excluding one-off items) increased by 3.2% to 41.515 billion baht. 

Finance costs, recognised under Thai Financial Reporting Standards  9, rose by 20.3% to 18.781 billion baht.

Thai Airways CEO Chai Eamsiri, speaking to Thansettakij media, emphasised that the airline’s underlying operational performance remained strong, with double-digit growth in margin. 

He attributed the overall loss to the capital restructuring, which involved debt-to-equity conversion for existing shareholders at 2.5452 baht per share, compared to a private placement price of 4.48 baht per share. 

This discrepancy necessitated an accounting adjustment.
Chai reassured stakeholders that this was a one-off event and would not affect the airline’s exit from its rehabilitation plan. 

He highlighted the airline’s continued profitability over the past two years, stating, “Last year, Thai Airways had the highest EBIT [earnings before interest, tax] margin growth in the world. This year, we expect to maintain operating profits. Today, Thai Airways has strong EBITDA [earnings before interest, tax, depreciation and amortisation] growth and positive equity, which aligns with the conditions of the rehabilitation plan.”