Bloomberg News

Air Arabia Climbs to Highest Price Since April on Profit

August 07, 2012

Air Arabia PJSC (AIRARABI) advanced to the highest since April after the Middle East’s biggest discount airline reported a 31 percent increase in second-quarter profit, beating estimates.

The shares climbed 0.8 percent to 65.1 fils at the close in Dubai, the highest level since April 17. Air Arabia was the fourth-biggest gainer and the most traded stock on the benchmark DFM General Index (DFMGI), which slipped 0.2 percent.

The airline said quarterly profit rose to 65 million dirhams ($18 million). EFG-Hermes Holding SAE estimated a profit of 53 million dirhams, while Securities & Investment Co. forecast 51 million dirhams, according to data compiled by Bloomberg. Air Arabia, which competes with state-owned FlyDubai, is adding aircraft to its bases in Morocco and Egypt to capture a rebound in demand for travel following last year’s so-called Arab Spring, Chief Executive Officer Adel Ali said in March.

The results were “very impressive and beat consensus,” said Chahir Hosni, equity sales manager at EFG-Hermes in Dubai. The company is poised to continue earnings growth as “the third-quarter is usually the busiest for Air Arabia,” he said.

The stock has climbed 11 percent so far this year compared with a 15 percent increase for the emirate’s stock index.

Six analysts recommend investors buy the shares, another six say hold and one sell, according to data compiled by Bloomberg.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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