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MAHB Registers 26.4% Net Profit Growth On The Back Of 10.7% Passenger Growth In FY2011

21 February 2012

Sepang, 21 February 2012 -- Malaysia Airports Holdings Berhad (MAHB) recorded revenues of RM2,754.8 million for the financial years ended 31 December 2011 (FY2011), representing a growth of 11.6% compared to the RM2,468.0 million recorded in the financial year ended 2010 (FY2010). Earnings before interest, tax, depreciation and amortization (EBITDA) grew 7.8% to RM826.5 million, from RM766.6 million in FY2010. Profit before tax and zakat (PBT) stood at RM574.1 million, representing an increase of 20.9% compared to the RM475.0 million registered in FY2010.

In line with the adoption of IC Interpretation 12: Service Concession Arrangements ("IC 12") effective 1 January 2011, MAHB recognizes the construction revenues and costs in accordance with FRS 111: Construction Contracts by reference to the stage of completion of the construction works of klia2 and Penang International Airport, which are public sector infrastructure assets and services currently being undertaken by MAHB. In FY2011 and FY2010, MAHB recognized the construction revenues and costs in relation to the aforesaid projects amounting to RM820.5 million and RM782.3 million respectively.

Stripping out the effects of IC 12, revenues for FY2011 was RM1,934.3 million, which was 6.7% higher than the RM1,812.9 million registered in FY2010. PBT for FY2011 was RM535.9 million, which was 20.3% higher than the RM445.5 million registered in FY2010.

Commenting on MAHB's performance, its Managing Director Tan Sri Bashir Ahmad Abdul Majid attributed the increase in operating revenues to stronger results from the airport operations segment, driven by strong air travel demand. MAHB recorded a double digit passenger growth of 10.7% in FY2011, with a total of 64.0 million passengers passed through MAHB's 39 airports in Malaysia. Both international and domestic passenger movements registered strong growth at 10.3% and 11.1% respectively. The total passenger movements in KLIA improved by 10.6%, whereby both KLIA-MTB & LCCT recorded positive growth of 7.6% and 14.3% respectively. All other airports recorded an aggregate growth in total passenger movements of 10.8%.

Total aircraft movements grew by 9.3% to 632,136 aircrafts, with the international sector recording a higher growth of 10.2% compared to the domestic sector, which registered a 8.9% growth.

"Excluding the IC 12 effects, revenues generated by our airport operations segment improved by 6.7%, to RM1,786.8 million. Aeronautical revenues which improved by 2.3% on the back of stronger passenger numbers, was however, impacted by the accrual of Airline Incentives in FY2011 amounting to RM91.8 million as compared to RM31.1 million accrued in FY2010. The airline incentives were granted to eligible airlines under the Airlines Recovery Program (ARP) announced on 18 November 2009 and effective for a period of three years ending 31 December 2011." Tan Sri Bashir Ahmad said.

"The strong PBT growth for FY2011 was a result of lower interest on borrowings due to the settlement of short term borrowings at the end of 2010, higher dividend received from investment in unquoted shares, lower share of associate losses, as well as the MAHB Group's cost saving initiatives resulting in lower professional fees, utilities and communications."

"Our non-aeronautical revenues recorded growth of 11.3% to RM897.8 million on the back of improved performance in the retail and rental businesses. MAHB's own retail business grew by 14.9%, ahead of overall passenger traffic growth of 10.7%, to RM473.3 million in FY2011. This was due to an increase in passenger volume and higher retail spending per passenger. Revenues from rental of space, advertising and other commercial segments also grew by 7.5%, to RM424.4 million, contributed mainly by the addition of new tenants and upward revision of rental charged to some retail tenants effective December 2010, higher tenant occupancy rate in 2011 and increased car park revenue due to higher pax movements and larger number of airport visitors." Tan Sri Bashir Ahmad added.

The non-airport operations segment recorded revenues of RM147.6 million in FY2011, representing a growth of 7.3% from RM137.6 million recorded in FY2010, due to higher revenues recorded in a hotel segment and agriculture and horticulture segment. The hotel segment grew 17.3% to RM73.8 million, mainly attributed to higher revenue from rooms, in line with the higher average room rate and beverages income. Despite lower production volume, the agriculture and horticulture segment registered revenues of RM55.4 million in FY2011, which was 18.6% higher than the RM46.7 million registered in FY2010, due to higher fresh fruit bunch price (2011: RM681/79,681MT vs. 2010: RM543/83,370MT). The reduction in the total crop harvested was due to the 1,721 hectares of land surrendered for the construction of klia2 and other land development initiatives to date. The project and repair maintenance segment recorded a decline of 34.3% to RM18.4 million, mainly due to reversal of management fees.

"Despite the ongoing global economic crisis, the political upheavals in North Africa and Middle East, and the natural disasters in North Asia and Oceania, the travel and tourism industry remained robust for Malaysia. As an airport operator, MAHB has been enjoying steady growth from carriers. The continuous growth by the full service carriers and low cost carriers had significantly contributed towards the strong passenger throughput at our airports in 2011. The travel and tourism industry outlook for year 2012 remains positive, MAHB has projected an overall passenger movement of 6.6% based on the expectation that GDP growth in Malaysia and Asia Pacific region remains robust.

Notwithstanding the recent downward revision in 2012 global GDP forecast by International Monetary Fund and reduction in Malaysia GDP forecast, we remain optimistic with our 2012 forecast, this is evidenced by our stable past performance, whereby we have been able to sustain growth of 5%-7% even during relatively poor economic conditions in the past. MAHB through its marketing efforts have been aggressively pursuing airlines globally through its various marketing initiatives.

Malaysia is excellently placed in the growth area of Asia Pacific generally and South East Asia specifically to be able to capitalize on the catchment area of 400 million people who live less than 2.5 hours from Kuala Lumpur. KLIA as Malaysia's main gateway and other regional international airports that are operated by MAHB are well positioned to be key hubs for the South East Asian region." Tan Sri Bashir Ahmad concluded.

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