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MAHB Recorded 22.7% Net Profit Growth On The Back Of 8.7% Passenger Growth In 1Q13

26 April 2013

Sepang, 26 April 2013 -- Malaysia Airports Holdings Berhad ("MAHB" or "Group") recorded revenues of RM1,027.2 million for the three months ended 31 March 2013 ("1Q13"), representing a growth of 56.2% higher than the RM657.7 million recorded in the corresponding period 2012 ("1Q12"). Earnings before interest, tax, depreciation and amortization ("EBITDA") grew 15.5% to RM252.1 million, from RM218.3 million in 1Q12. Profit before tax and zakat ("PBT") stood at RM185.6 million, representing an increase of 20.8% compared to the RM153.7 million registered in 1Q12.

In line with the adoption of IC Interpretation 12: Service Concession Arrangements ("IC 12") effective 1 January 2012, 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 1Q13 and 1Q12, MAHB recognized the construction revenues in relation to the aforesaid projects amounting to RM454.7 million and RM146.6 million, while the construction costs are RM435.0 million and RM140.0 million respectively.

Excluding the effects of IC 12, revenues for 1Q13 was RM572.6 million, which was 12.0% higher than the RM511.1 million registered in 1Q12. PBT for 1Q13 was RM165.9 million, which was 12.9% higher than the RM147.0 million registered in 1Q12.

The increase in operating revenues was attributed to stronger results from the airport operations segment, driven by buoyant air travel demand. MAHB recorded a passenger growth of 8.7% in 1Q13, with a total of 17.4 million passengers passed through MAHB's 39 airports in Malaysia. Both international and domestic passenger movements registered positive growth at 12.2% and 5.4% respectively. The total passenger movements in KLIA recorded robust growth by 11.1%, whereby both KLIA-MTB & LCCT registered encouraging growth of 15.3% and 6.7% respectively. All other airports recorded an aggregate growth in total passenger movements of 5.2%.

Total aircraft movements grew by 7.2% to 168,955 aircrafts, with the international sector recording a higher growth of 11.5% compared to the domestic sector, which registered a 4.8% growth.

Aeronautical revenues improved by 13.4% on the back of stronger passenger numbers and implementation of new landing and parking charges by 9% and 18% respectively on 1 January 2013 (compounded year on year which had taken effect from 1 January 2012 until 1 January 2014).

Non-aeronautical revenues recorded growth of 11.1% to RM262.7 million on the back of improved performance in the retail and commercial businesses. MAHB's own retail business grew by 8.2%, in tandem of overall passenger traffic growth of 8.7%, to RM142.0 million in 1Q13. This was due to increase in passenger volume and higher retail spending per passenger pursuant to various promotional activities rolled out at the airports. Revenue from rental of space, advertising and other commercial segments grew by 14.7% to RM120.7 million, contributed mainly by the higher royalty resulting from higher sales at KLIA, and increased car park revenue due to higher pax movements and higher number of airport visitors.

The non-airport operations segment recorded revenues of RM35.8 million in 1Q13, representing a growth of 8.8% from RM32.9 million recorded in 1Q12, mainly due to higher revenue recorded in the project & repair maintenance segment. However, the revenue growth was negated by the decrease in revenue in the agriculture and hotel segments. The agriculture and horticulture segment registered revenue of RM6.9 million in 1Q13, which was 33.1% lower than the RM9.8 million previously registered in 1Q12 due to lower price attained for fresh fruit bunch price (1Q13: RM435/13,199MT vs. 1Q12: RM643/13,647MT). The decrease in production was in line with the industry performance due to the occurrence of El Nino in recent years which have a negative effect on the current oil palm yield. Meanwhile, the hotel segment recorded a decline of 8.9% to RM6.9 million due to the temporary effect of hotel renovation project.

Operating costs for 1Q13 grew 12.5%, in line with revenue growth for the period due to higher staff costs, utilities and maintenance costs. The higher staff costs were mainly due to annual increments, bonus, additional recruitment and the impact of salary adjustments. The increase in utilities and maintenance costs were in line with stronger passenger movements.

With regards to the construction of klia2, MAHB has noticed that some of the contractors continue to be behind schedule. The contractors, however, have reaffirmed their commitment to work towards the completion date of 28 June 2013. MAHB will diligently monitor the progress and will be meeting the contractors, airlines and agencies again soon to determine their readiness towards the date of 28 June 2013. MAHB wishes to reiterate that all stakeholders must be ready without compromising safety, quality and operational efficiency in completing klia2.

The year 2013 is expected to be a better year for MAHB in terms of overall passenger traffic performance. Many of the airline routes and capacity cuts over the last year have been reinstated and replaced by both local and foreign carriers, as evidenced by the stronger traffic growth of 8.7% registered in 1Q13. The entry of new airlines such as Malindo Air, Air France, Turkish Airlines, as well as MAS' entry as a full member of oneworld on 1 February 2013 bode well for the Malaysian aviation industry. The Malaysian economy is expected to remain robust with an expansion of 5-6% in 2013, supported by sustained private consumptions and investments in the country. The positive economic outlook coupled with the dynamic tourism outlook in the country will continue to fuel the demand for air travel, thus MAHB is optimistic to achieve passenger growth of 7.1% in 2013.

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