Air Arabia's shares sink to their lowest level since its 2007 listing after the airline's earnings disappoint analysts.
Air Arabia stock falls to record low
Air Arabia stock fell to a record low yesterday after first-quarter earnings failed to lift investor sentiment for the Middle East and Africa region's biggest low-cost carrier.
The shares dipped to their lowest since the company's 2007 listing after the airline, based in Sharjah, posted a decline in profits for the first quarter.
The airline's shares fell 1.62 per cent to 73 fils in trading yesterday. It was first listed on the Dubai Financial Market at Dh1 a share.
The stall in market value came as the carrier reported a dip in profits of 13.9 per cent to Dh42.7 million (US$11.6m) for the first quarter of the year, compared with the same quarter last year.
The drop was a result of "pressure on travel trends caused by recent regional uncertainty and sustained high oil prices", the company said.
Air Arabia posted a 6.4 per cent rise in revenue to Dh513m for the first quarter on the same period last year, as passenger numbers increased 11 per cent to 1.2 million.
High oil prices have nibbled away at airlines' profits across the world. Brent crude futures have hovered around US$120 a barrel since the start of last month, although prices sank $3.37 to $117.31 yesterday.
Air Arabia stock's value has declined steadily since highs of September 2009, and has lost 10.87 per cent so far this year.
"We knew it was going to be a tough quarter," said Kareem Murad, an analyst at Shuaa Capital.