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MAHB Registers 6.7% Net Profit Growth On The Back Of 6.5% Passenger Growth In 1Q12

26 April 2012

Sepang, 26 April 2012 - Malaysia Airports Holdings Berhad (MAHB) recorded a revenue of RM657.7 million for the three months ended 31 March 2012 (1Q12), representing a growth of 6.5% compared to RM617.8 million in the corresponding period 2011 (1Q11). Earnings before interest, tax, depreciation and amortization (EBITDA) grew 6.1% to RM218.3 million, from RM205.8 million in 1Q11. Profit before tax and zakat (PBT) stood at RM153.7 million, representing an increase of 9.0% compared to the RM140.9 million registered in 1Q11.

In line with the adoption of IC Interpretation 12: Service Concession Arrangements (IC 12) effective 1 January 2011, MAHB recognizes the construction revenue 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 construction works on public sector infrastructure assets and services currently being undertaken by MAHB. In 1Q12 , MAHB recognized the construction revenue and costs in relation to the aforesaid projects amounting to RM146.6 million and RM140.0 million respectively.

Excluding the effects of IC 12, revenue for 1Q12 was RM511.1 million, which was 12.2% higher than the RM455.4 million registered in 1Q11. PBT for 1Q12 was RM147.0 million, which was 10.0% higher than the RM133.6 million registered in 1Q11.

Commenting on MAHB's performance, its Managing Director Tan Sri Bashir Ahmad Abdul Majid attributed the increase in operating revenue to stronger results from the airport operations segment, driven by the resilience in air travel demand. MAHB recorded passenger growth of 6.5% in 1Q12, with a total of 16.0 million passengers having pass through MAHB's 39 airports in Malaysia. Both international and domestic passenger movements registered strong growth at 6.5% and 6.4% respectively. The total passenger movements in KLIA improved by 6.9%, whereby both KLIA-MTB & LCCT recorded positive growth of 2.6% and 11.6% respectively. All other airports recorded an aggregate growth in total passenger movements of 5.9%.

Total aircraft movements grew by 3.2% to 157,577 aircrafts, with the international sector recording a higher growth of 3.9% compared to the domestic sector, which registered a 2.8% growth.

"Excluding the IC 12 effects, revenue generated by our airport operations segment improved by 13.1% to RM478.2 million. Aeronautical revenue improved by 18.1% on the back of stronger passenger numbers and implementation of new rates. The Government had approved for MAHB to implement new Passenger Service Charges (PSC) effective 15 November 2011 and aircraft landing and parking charges effective 1 January 2012. With the new PSC, MAHB Group will not be entitled to claim for the Marginal Cost Support for PSC (MARCS PSC) as the Group had done previously as the new rates are equivalent to the benchmark rate as stipulated in the Operating Agreements signed with the Government on 12 February 2009," Tan Sri Bashir Ahmad said.

"The strong PBT growth for 1Q11 was attributed to the positive growth in revenue and lower share of associate losses. MAHB's associate investment in Maldives, namely the GMR Male International Airport Private Limited had recorded a higher profit in 1Q12, while the investment in Turkey - Istanbul Sabiha Gokcen International Airport had recorded lower share of associate losses in 1Q12 compared to the corresponding quarter last year. The strong PBT performance was however negated by higher operating costs due to higher staff costs, utilities and maintenance costs. The higher staff costs were mainly due to annual increments, additional recruitments and the impact of salary adjustments arising from the finalization of Non-Executive - 6th Collective Agreement in October 2011. The increase in utilities and maintenance costs were in line with stronger passenger movements."

"Our non-aeronautical revenue recorded a growth of 8.4% to RM236.6 million on the back of improved performance in the retail and rental businesses. MAHB's own retail business grew by 15.8%, ahead of overall passenger traffic growth of 6.5% to RM131.3 million in 1Q12. This was due to an increase in passenger volume and higher retail spending per passenger. Revenue from rental of space, advertising and other commercial segments grew by 0.5% to RM105.3 million, contributed mainly by higher rental royalty resulting from the higher sales at KLIA and increased car park revenue due to higher number of air passengers and airport visitors." Tan Sri Bashir Ahmad added.

The non-airport operations segment recorded revenue of RM32.9 million in 1Q12, representing a growth of 0.9% from RM32.6 million recorded in 1Q11 mainly due to higher revenue recorded in the hotel segment. The hotel segment grew 33.7% to RM21.2 million, mainly attributed to higher revenue from room occupancy as well as the catering business for various events held at Sepang International Circuit. The agriculture and horticulture segment registered revenue of RM9.1 million in 1Q12 which was 33.8% lower than the RM13.7 million registered in 1Q11 due to lower fresh fruit bunch price (2012: RM643/13,647MT vs. 2011: RM791/16,811MT). The decrease in production was in line with the industry performance due to the El Nino effects in recent years which have a negative impact on the current oil palm yield. The project and repair maintenance segment recorded a decline of 12.8% to RM2.6 million, mainly due to lower external projects being secured for the period.

"Global aviation industry started the year 2012 with a remarkable passenger traffic growth, supported by sustained rise in global demand for air travel over time. Asian airports, who are amongst the fastest growing airports globally have also contributed strongly to the buoyant traffic growth in the Asia Pacific region. The residual effects of political unrest on air traffic have now subsided, with the African and Middle East regions having recovered strongly as compared to the height of the Arab spring in February 2011. While the threat of an European financial meltdown seems more remote compared to a few months ago, fuel price level remains a challenging risk for the aviation industry in 2012. We remain cautious for the year ahead and have projected an overall passenger movement of between 6% to 7% based on the expectation that the travel and tourism industry remains robust for Malaysia," Tan Sri Bashir Ahmad concluded.

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