KUALA LUMPUR, May 28 (Bernama) — Brahim’s Holdings Bhd’s pre-tax profit for the first quarter ended March 31, 2015 declined to RM5.51 million from RM11.59 million in the same quarter last year.
The company said the decline in earnings resulted largely from continuing concessions given to Malaysia Airlines Bhd (MAS) under the settlement agreement dated Feb 26, 2015.
Revenue also decreased to RM85.73 million from RM92.47 million previously, Brahim’s said in its filing to Bursa Malaysia.
In an earlier announcement on May 11, Brahim’s said its 70 per cent owned subsidiary, Brahim’s Airline Catering Sdn Bhd entered into new catering agreements (NCAs) with MAS on May 10, 2015 as part of the MAS recovery plan.
The NCAs cover in-flight catering services for wide-bodied aircraft and narrow-bodied aircraft and would commence on Sept 1, 2015 or such other date as agreed.
The NCAs would remain in force for a period of five years with an additional five-year renewal subject to no breach of any of key events and other conditions.
Brahim’s said the outlook for the in-flight catering segment is expected to be challenging despite the expected increase in passenger load in the second quarter of 2015.
Revenue from in-flight catering and cabin-handling services for MAS is expected to be consistent with the previous period.
“Profit margins from these activities may be affected due to the implementation of the revised pricing under the new catering agreements,” it said.
The performance of the F&B segment for the first quarter of 2015 continued to remain in a loss position but is expected to be narrowed gradually in the coming quarters following the implementation of its turnaround plan.