MMAG sells Boeing cargo aircraft, incurs RM12.7 million loss

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MMAG sells cargo aircraft

Highlights

MMAG Holdings sold a Boeing 737-400SF cargo aircraft to Mont Gabanon Airlines for U.S.$2.8 million, recording a RM12.69 million loss against a book value of RM24.12 million.
MJets Air's aircraft disposal is expected to be completed in the fourth quarter of 2026, with proceeds to be used for working capital needs, including operating expenses, lease payments and debt repayments.
The disposal will increase losses attributable to MMAG shareholders to RM91.93 million and reduce net assets to RM184.68 million at the end of June 2026.

This article was translated from the original. Read the original version by our correspondent here.

Sale details and financial impact

According to The Edge Malaysia, as reported in a stock exchange filing on Monday, MMAG Holdings Bhd said its indirect subsidiary, MJets Air Sdn Bhd, had entered into an agreement to sell a Boeing 737-400SF cargo aircraft to Mont Gabanon Airlines, which is owned by a privately held company incorporated in the Democratic Republic of Congo.

The aircraft's sale price is U.S.$2.8 million, equivalent to RM11.43 million. MMAG said the transaction resulted in a RM12.69 million loss based on the aircraft's unaudited net book value of RM24.12 million as at 30 Sept 2026, compared with the agreed sale price.

MJets Air acquired the aircraft in January 2025 for U.S.$6.55 million. The disposal is expected to be completed in the fourth quarter of 2026 and forms part of the group's review of its aviation assets to streamline operations.

Operational pressures and implications for the group's position

MMAG said ongoing geopolitical tensions and global uncertainty, coupled with a surge in fuel prices, have significantly increased operating costs while weighing on demand for charter services, particularly for that aircraft model. According to the group, these conditions continue to constrain the aircraft's ability to generate sufficient revenue to cover operating costs.

Sale proceeds will be used for MJets Air's working capital needs, including operating expenses, lease payments and outstanding debt. Based on MMAG's pro forma estimates, the disposal will increase losses attributable to shareholders to RM91.93 million from RM79.24 million for the financial period ended 31 March 2026.

For the three-month period ended 30 June 2026, MMAG recorded a net loss of RM9.42 million on revenue of RM166.09 million. As at the end of June, the group's total liabilities stood at RM566.18 million, while its net assets are expected to decline to RM184.68 million from RM197.37 million and its gearing ratio to edge up to 0.18 times from 0.17 times. MMAG Holdings shares closed half a sen higher, or 25%, at 2.5 sen on Monday.

In our earlier article on AirAsia's financial pressure, we examined the debate over whether the federal government should intervene as the company seeks fresh financing and plans to reduce seat capacity to slow cash outflows. We also looked at how rising jet fuel prices, foreign exchange losses and debt burdens could affect domestic fares, competition and connectivity between Sabah and Peninsular Malaysia.

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