MAHB to complete Hyderabad sale by year-end

By RAHIMI YUNUS / Pic By TMR

Malaysia Airports Holdings Bhd (MAHB) hopes to conclude the divestment of its remaining 11% stake in GMR Hyderabad International Airport Ltd (GHIAL) to GMR Airports Ltd by the end of this year.

The stake is valued at about RM295.3 million.

“MAHB exited its investment in Delhi a couple of years back. Hopefully, we can sell the Hyderabad asset by year- end,” acting group CEO Raja Azmi Raja Nazuddin said at a signing ceremony of a memorandum of understanding (MoU) between MAHB and Malaysian Investment Development Authority (Mida) in Kuala Lumpur last Friday.

Raja Azmi said the company will evaluate various prospective overseas investments to ensure value accretion based on a right business model.

On the Philippines’ Clark International Airport, he said MAHB did not submit any bid for the 15 billion pesos (RM1.1 billion) operations and maintenance (O&M) contract despite media reports stating a local partner was keen to partner MAHB on the job.

Raja Azmi said the group is hoping to turn around its Istanbul Sabiha Gocken International Airport (ISGIA) in Turkey in the next two to three years. The airport operator is also looking for strategic partners in Turkey to add more value instead of just as “partners for cash”.

Raja Azmi said MAHB’s overseas investment would hinge on three business models moving forward — either via equity investment such as in Turkey, smaller investments similar to what it did in Hyderabad and Delhi, or focusing on O&M works like in Doha.

“As far as new prepositions in other countries is concerned, we will have to evaluate case by case, project by project to determine which business model we want to get into for our overseas investments,” he said.

Raja Azmi said the company’s international expansion would be leaning closer to the region or the Middle East due to familiarity.

His top priority is to improve service quality at home as an airport operator, in areas like baggage handling, train system, toilet cleanliness and other services.

The MoU signed will see MAHB working with Mida to promote the KLIA Aeropolis and Subang Aerotech Park developments to attract investments.

MAHB’s net profit surged 590% year-on-year (YoY) to RM444.6 million for its first quarter ended March 31, 2018 (1Q18), on unrealised gain on its investment in an Indian airport.

It noted that the gain through its investment in GHIAL amounted to RM258.4 million.

Cost of operations increased by 3.5% YoY due to the higher construction cost of the boarding hall expansion in ISGIA of RM25.8 million.

Revenue for 1Q18 grew 11.2% YoY to RM1.22 billion as its airport operations posted a 12.2% YoY revenue growth to RM1.14 billion, driven by the aeronautical and non-aero-nautical divisions.