Muhibbah proved me wrong also....................

Le Don

Made a big mistake.

LOL!

AirAsia hedges their jet fuel hedging using Singapore Jet Kerosene.

http://www.cmegroup.com/trading/energy/ref...ap-futures.html

Here's to backup what I am saying about Tony's 'hedging' habits. LOL!

Quote from their May profit report:

As at 31 March 2014, the Group has entered into Singapore Jet Kerosene fixed swaps
which represents up to 17% of the Group‟s total budgeted fuel consumption for the
remaining quarters of 2014.

Quote from their Aug profit report.

As at 30 June 2014, the Group has entered into Singapore Jet Kerosene fixed swap which
represents up to 36% of the Group’s total budgeted fuel consumption for the second half of
2014.

As you can see, AirAsia hedged more on jet fuel hedges the minute he saw the down swing in prices!




---------------

Also:

http://www.theedgemarkets.com/en/article/a...ater-turbulence




This post has been edited by Boon3: Nov 19 2014, 09:45 AM

Is that so.

Anyway, I just don't trust the company enough to trade in it.

Le Don

Quote from yesterday report. See page 27.

As at 30 September 2014, the Group has entered into Singapore Jet Kerosene fixed swaps which represents up to 43% of the Group’s total budgeted fuel consumption for the 4th quarter of 2014.

The Group has also entered into Singapore Jet Kerosene fixed swap which represents up to 21% and 10% of the Group’s budgeted fuel consumption for the 1st quarter and 2nd quarter of 2015 respectively.

Comments:

As can be seen again, Tony's foot prints is clearly visible.

As SJK (Singapore Jet Kerosene) prices fell, Tony got AirAsia entering more fixed swap hedges.

Now on page 28.

AirAsia, via its hedges, now owns 2.74 million barrels of jet fuel!!!!

previous quarter, the amount was 1.1 million barrel.

A year ago, ie same quarter last fiscal year? Only 0.43 million barrels!!

This was mentioned:

As at 30 September 2013, the Group has entered into Singapore Jet Kerosene fixed swaps which represent up to 30% of the Group‟s total budgeted fuel consumption for the final quarter of 2013 with a weighted average price of USD123.13 per barrel.

* interestingly, AirAsia openly stated its average purchase price, which was USD123.13 per barrel.

Comments:

Now yesterday report was for the accounting period ending Sep 2014.

Look at the link yesterday again: http://www.cmegroup.com/trading/energy/ref...ap-futures.html

Clicking on the charts for Nov 2014, I see this:



As can be seen, yes a big decline was seen in Sep.... which is understandable why Tony increased AirAsia jet fuel hedges...

BUT as can be seen, the bigger decline in prices can be seen after Sep, ie in Oct.

WHICH MEANS.......

clearly Tony made these hedges way too early.........

(ironic isn't it? Just exactly like stocks, one should not start buying early in a downfall in prices!!! What is cheap, could get much cheaper!!)

now, AirAsia, as at Sep 2014, has hedged 43% of its fuel consumption for the 4th quarter.....
and " 21% and 10% of the Group’s budgeted fuel consumption for the 1st quarter and 2nd quarter of 2015 respectively"......

so with jet fuel.... becoming much cheaper now..... that means that currently 2.74 million barrels of crude oil was hedged at a much higher price!!!

(ps: not an accountant but I believe there should be some accounting losses from these hedges come next reporting quarter!!)

so back to the main question..... has falling jet fuel prices benefit AirAsia?



This post has been edited by Boon3: Nov 20 2014, 08:16 AM

Not a fan of CPO.

Airasia too complex.
Will not be an easy trade.
Many things not looking good.
Total debts now over 11 Billion!!!!!!

Thanks for sharing la.

If you have the time read and compare Airasia's quarterlies.

Tony is a hedge gambler!!

As it is, as of Sept 2014, he has hedged a lot of positions already.

Fir jet fuel, the actual financial data shows he is way to early with his bets.

And yes, if you read my earlier comments the main component in his company is the USD.

11 billion debts....mostly denominated in USD!!!!

Currently..his forex hedge is looking good. Hedged ay 3.22++

Yes but if you read the quartelies, the data showed clearly the characteristics of a gambling.

See the data.

When the jet fuel started dropping, Tony bought more and more jet fuel swaps.

As it is, the data showed that Tony bought too early. See previous page postings.

Few years back, I remember Tony losing few hundred millions in oil and forex hedges.

Damage was so massive that Tony was forced to make press statements. Go google and you should find articles on it.

holybo

Have some time now....

Run a search on Goog using the simplest phrase "Airasia hedge bets"

First article: http://www.bloomberg.com/apps/news?pid=new...id=awrmaa4rin3o



Cannot remember exactly the losses...
But if I am not mistaken hedge losses ran into the hundreds of millions.

Fact: The previous quarter, AirAsia hedged 1.1 million barrels of jet fuel

Fact: Most recent quarter, ie. period ending Sep 2014, the hedge positions rose to 2.74 million barrels!

Fact: For comparison sake, last year, ie period ending Sep 2013, AirAsia had only 0.43 million barrals of jet fuel!

Fact: Yes, jet fuel declined sharply for the period ending Sep 2014.

Fact: Since Oct 2014, jet fuel declined even more!

Fact: The 2.74 million barrels of jet fuel WAS HEDGED at a much higher price compared to current hedge prices.

Question (since I no accountant... LOL!) : Would those 2.74 million jet fuel hedges be accounted as losses in its books?

That probably will raise a huge debate.

As it is currently...
I believe not all school kids have access to computers at home.
I believe the kampung stats are even worst....

So how good will this idea sell???

If govt takes the initiative to provide laptops/pc... at what cost? at whose cost?

And also.... if it does go thru....... SASBADI could be a huge loser.......

And interesting the chart shows signs that perhaps the stock is stabilizing around current prices.

And this kind of exemplify my point.... when a stock falls, don't be so kiasu and try to buy the stock fast..... let the fall subside first before making any buying decision.

Again, YES , I am aware all business needs some sort of hedging.

But hedges can easily be abused and turn into a form of gambling !!!

If you know that past of 2008 and the hundred of millions of dollars lost via its hedges....
you would rather be extremely cautious with what Tony has done recently.

Found it....

For its fourth quarter 2008, AirAsia booked a 428 million loss under exception items which was described as follows:



Page 14 of the pdf file from AirAsia profit report: http://www.bursamalaysia.com/market/listed...ncements/590694

Point now: 2.74 million barrels of jet fuel hedges was made by end SEP 2014.

Compare those price to now... see back previous posted chart.



If based on that chart... end Sep 2014... the fuel closed lowest at around 109.
Assume la... AirAsia managed to hedge all all that low price of 109....

Now jet fuel price has collapsed to around 96/97.....

So those fuel hedge made earlier...... all carrying huge losses! no?

heeeeheeeee ......

why stay away laaaa ?

Errr.... I don't see anything too wrong.

Haiyaaaa..... I don't simply lump everything together one...

and I don't simply simply say things one.

This company... below.... u say doing good or bad?

hahaha..... didn't put stock name on the earlier posting....



compare those shitty results with stock chart....



see?

this is why I said I didn't see anything wrong.

Can....

..just ask Tony to double up all their jet fuel hedges lor.

From Malaysian point of view.............

His company's debts.....
currently AirAsia debts stands at 11.8 BILLION!
.... and could easily rise more.... if AirAsia takes in new delivery of fei kei.....

....... if anything goes wrong.............. huhu.........

Problem is...... I believe that Tony was wrongly portrayed as a hero.

Hello... we are looking at 2 companies!!!

AAX and AA.