By: Bedour Al Raie

Dubai – Mubasher: Air Arabia’s stock, listed on the Dubai Financial Market (DFM), surged by 4.2% a short while before the closing of Sunday’s session, in anticipation of the Company’s annual financials.

The stock rose to AED 1.73, following a turnover of AED 22.7 million as 13.31 million shares were traded through 206 transactions.

The transport sector recorded an overall 3.13% rise before the closing of the session as 17.20 million shares were exchanged at a turnover of AED 28.22 million. Air Arabia accounted for 80% of the sector’s turnover.

Capital market analyst Wadah Taha told Mubasher that it is expected that Air Arabia will achieve a significant growth in its annual profits for 2014, exceeding AED 600 million. Air Arabia had reported an annual profit of AED 420.74 million during FY13.

The UAE airline had reported a net profit of AED 498.38 million ($135.7 million) during the first nine months of 2014, against AED 340.67 million ($92.75 million) during the same period in 2013.

The recent oil price decline have come in favour of the airline, Taha told Mubasher in an exclusive comment, adding that a decline in operational expenses will affect the Company’s net profit, particularly in the fourth quarter when the oil price plunge began.

Worth noting, Al Watani Capital recently set the fair value of Air Arabia’s stock at AED 1.88 per share with the recommendation “buy”.

It may be expected that Air Arabia may distribute a cash dividend of around 10%, the analyst added.

The Dubai-based Company had approved a dividend distribution of 7.25% or AED 0.725 per share in FY13.

Translated by: Nada Adel Sobhi