MAHB 2Q profit up 38.3% on stronger revenue base

Net profit comes in at RM86m, which helps offset the RM23.8m cost increase at ISGIA

by MARK RAO / TMRpic

MALAYSIA Airports Holdings Bhd (MAHB) recorded a higher profit for the second quarter ended June 30, 2018 (2Q18), boosted by better revenues from key businesses despite the losses incurred in its Turkish operations.

The airport operator’s net profit jumped 38.3% year-on-year (YoY) to RM86.12 million as revenue rose 4.5% to RM1.15 billion over the same period.

This helped offset the 2.2% or RM23.8 million YoY cost increase resulting from the boarding hall expansion of its Istanbul Sabiha Gokcen International Airport (ISGIA) — one of two international airports serving Istanbul, Turkey.

ISGIA also operated at a pretax loss of RM57.4 million, while Malaysian operations saw an 11.5% YoY rise in pretax profit to RM179.1 million.

Profit from associate companies also rose in 2Q18 on increased contributions from Kuala Lumpur Aviation Fuelling System Sdn Bhd and Segi Astana Sdn Bhd.

Turnover was supported by both domestic and international airport operations, alongside construction revenue from ISGIA’s boarding hall expansion.

Traffic for Malaysian operations grew 2.5% YoY to 24.3 million passengers, while traffic for ISGIA was up 7.7% at 8.4 million passengers.

MAHB said the domestic traffic growth was spurred by higher air travel demand during the holiday and festive seasons, and supported by airlines’ seat capacity growth and improving average load factors.

Non-aeronautical revenue in 2Q18 was up on stronger concessionaires and retailers’ sales, however, aeronautical revenue was down 0.5% at RM538.3 milion. Non-airport income fell on lower turnover from project and repair maintenance, and the hotel and agriculture businesses.

For the first half of the year (1H18), MAHB’s net profit was higher at RM530.71 million, while revenue rose 8.2% YoY to RM2.37 billion.

Total passenger traffic for the group rose 5.2% to 64.9 million passengers in 1H18 on higher traffic from both domestic and overseas airports. Aircraft movement for the period was also up by 2.6%, supported by international operations which offset the decline noted domestically.

MAHB said its 2018 showing is expected to be stronger based on the growth momentum from Malaysian and Turkish operations.

“Malaysia’s economic growth is expected to continue its momentum in 2018. Combined with moderated airlines seat capacity filings, passenger growth for the next six months is expected to be positive,” it said in a filing yesterday.

MAHB added that the growth momentum in Turkey is expected to hold based on current market conditions.

It announced a five sen dividend to be paid on Sept 28 for its financial year 2018.