Kuwait – Mubasher: NBK Capital MENA Research set its fair value (FV) for Jazeera Airways at KWD 0.580 per share with a “Buy” recommendation.

The company's revenues went down 1.5% y-o-y in the second quarter of 2015 to KWD 13.8 million (7% below Jazeera's forecast), stated NBK Capital.

Passengers increased by 4.5% y-o-y but yield declined by 5.8% y-o-y due to market forces, such as the decline in ticket prices following the drop in oil prices as well as continued capacity dumping in the Kuwait market.

However, load factor improved from 67% in the second quarter of 2014 to 70% in the same period of the previous year.

The Kuwaiti carrier's operating profit increased by 7.7% y-o-y in Q2-2015 to KWD 2.2 million as the company benefited from the increase in passengers as well as the decline in fuel prices.

Group net income (which includes income from discontinued operations) increased by 14% y-o-y in Q2-2015 to KWD 3.2 million.

The company’s management indicated during the earnings webcast that they are exploring opportunities to expand into in the Iranian market as a part of its growth strategy for 2016 and 2017, noted NBK Capital.