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MAHB Registers Double Digit Year-On-Year Passenger Growth At 12.7% For FY2010

16 February 2011

EBITDA grew 10.1% to RM707.1 million on the back of higher Revenue growth

PETALING JAYA, 16 February 2011 - Malaysia Airports Holdings Berhad ("MAHB") recorded another year of record revenue and profitability for the financial year ended 31 December 2010 ("FY2010"). Revenue stood at RM1,812.9 million, representing a growth of 10.7% or RM175.8 million higher than the RM1,637.1 million recorded in the previous financial year ("FY2009"). Earnings before interest, tax, depreciation and amortization (EBITDA) improved by 10.1%, or RM65.0 million to RM707.1 million, from RM642.1 million in FY2009.

Profit before tax and zakat ("PBT") stood at RM445.0 million, representing a decline of 7.3% compared to FY2009. This was mainly due to the adoption of Financial Reporting Standards 139 ("FRS 139") Financial Instruments: Recognition and Measurement, resulting in a higher share of losses in an associate company, namely Sabiha Gokcen International Airport Limited ("SGIA"). MAHB owns a 20% equity stake in SGIA which develops, operates and manages an airport in Istanbul, Turkey.

This is MAHB's first-time adoption of FRS 139, which is a requirement in Malaysia effective 1st January 2010. Under FRS 139, all financial instruments have to be stated at fair value.

Stripping out the effects of FRS 139, the PBT for FY2010 was RM500.0 million, which was 4.1% or RM19.7 million higher than the RM480.1 million registered in FY2009.

Commenting on MAHB's outstanding financial performance, its managing director Tan Sri Bashir Ahmad Abdul Majid attributed the increase in revenue due to stronger results from the airport operations segment, driven by strong recovery in air travel demand. "MAHB Group have achieved record turnover for the eighth consecutive year now, we have been able to consistently deliver commendable operating results. Our FY2010 operating profit stood strongly at RM544.1 million, representing a growth of 10.7% or RM52.5 million, from RM491.6 million recorded in FY2009. After considering the FRS139 impact and other one-off transactions pursuant to our restructuring exercise, the Group had performed better operationally as reflected by the higher passenger and revenue numbers."

"MAHB also continued to surpass its headline financial Key Performance Indicators (KPIs) for FY2010, posting EBITDA of RM707.1 million and return on equity (ROE) of 10.23% against our Headline KPIs of RM620.0 million and 9.22 % respectively." said Tan Sri Bashir Ahmad.

"In line with the strong recovery in the global aviation industry, MAHB recorded a double digit passenger growth of 12.7% in FY2010, maintaining the positive momentum established in FY2009. A total of 57.8 million passengers passed through MAHB's 39 airports in Malaysia, with growth in the international passenger movements outpacing the growth in domestic passenger movements at 21.3% and 5.6% respectively."

"On the international traffic, we are particularly pleased to witness strong passenger growth in both the Main Terminal Building and Low Cost Carriers Terminal which have registered 18.2% and 25.0% growth respectively. The tourism initiatives promoted by the Government throughout the year coupled with the aggressive fare promotions by the Asian and Middle Eastern airlines alike have indeed driven the remarkable growth in both the traffic segments." Tan Sri Bashir Ahmad added.

Total aircraft movements grew by 7.9% to 578,086 aircrafts, with the international sector recording a higher growth of 11.6% compared to the domestic sector which registered a 5.9% growth. Cargo movements also grew 14.2% in tandem with the global economic recovery, where both international and domestic sectors registered growth of 13.2% and 19.1% respectively.

"Following higher passenger numbers, revenue generated by our airport operations segment improved by 11.9% or RM178.7 million, to RM1,675.2 million. Aeronautical revenue grew 9.9% or RM78.2 million to RM868.7 million resulting from higher passenger growth. Our non-aeronautical revenue recorded growth of 14.2% or RM100.4 million to RM806.5 million underpinned by growth in retail business and higher rental revenue derived from additional commercial space.", Tan Sri Bashir said.

"Non-aeronautical revenue stood at a higher proportion against aeronautical revenue at 54.5% and 45.5% respectively in FY2010. This is in line with our long-term objective to grow this branch of our business and we expect the non-aeronautical business to continue outperform the aeronautical business moving forward.", Tan Sri Bashir added.

MAHB's own retail business grew by 17.1%, ahead of overall passenger traffic growth of 12.7%, to RM411.8 million in FY2010, mainly due to increase in passenger volume and higher retail spending per passenger. The revenue from rental of space, advertising and other commercials also grew by 8.8%, or RM26.0 million to RM321.3 million, contributed mainly by higher rental as a result of an increase in the number of outlets and concessionaires at the Satellite Building and LCCT, resulting from the increase in commercial space pursuant to the expansion of LCCT in April 2009 and subsequently the completion of the Satellite Retail Optimisation Programme (SROP) in November 2009.

The non-airport operations segment recorded a revenue of RM137.6 million in FY2010, representing a marginal decline of 2.1% or RM2.9 million from RM140.5 million recorded in FY2009, mainly due to lower revenue recorded in project and repair maintenance services as well as the agriculture segment. The project and repair maintenance services registered a revenue of RM28.0 million, which was 18.7% or RM6.4 million lower than the RM34.5 million registered in FY2009 due to lower number of project secured in FY2010. Despite an increase in fresh fruit bunch price, the agriculture segment recorded a lower income of RM46.7 million, representing a decline of 3.8% or RM1.8 million from RM48.5 million recorded in FY2009.

This was due to lower total crop harvested in FY2010 (FY2010: 83,370MT/ RM543 vs. FY2009: 111,700MT/ RM412) contributed by the clearing of a portion of the plantation land to make way for the construction of KLIA2. Despite the above, the hotel business segment recorded a growth of 9.3%, registering a revenue of RM62.9 million due to higher room rate, occupancy rate and food and beverages income.

"We are seeing good traffic and earnings momentum going into 2011, as MAHB continue to benefit from the positive economic prospects in Malaysia and the emerging markets around the region. IATA has projected a traffic growth of 5.3% in 2011, with Asia-Pacific, the world's largest air travel market continue to lead the growth. The robust performance by both the conventional and low-cost carriers in FY2010 has provided a strong platform to prosper further next year hence we are optimistic of a better year in 2011.", Tan Sri Bashir concluded.

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