MAHB’s 3Q19 earnings rise 17.4% on revenue

The 2019 budgeted traffic numbers are realistically achievable with the positive average load factors


MALAYSIA Airports Holdings Bhd’s (MAHB) net profit rose 17.4% year-on-year (YoY) to RM197.87 million in the third quarter ended Sept 30, 2019 (3Q19), from RM168.49 million recorded in the previous year’s corresponding period, as a result of higher revenue contributions.

MAHB stated in a Bursa Malaysia filing yesterday that its revenue for the quarter increased 10.2% YoY to RM1.35 billion from RM1.23 billion, in line with the overall passenger growth of 6.7%, Earnings per share for the quarter also climbed to 11.05 sen from 9.28 sen in the previous year’s corresponding period.

For the cumulative nine months, MAHB’s net profit fell 27.4% YoY to RM507.52 million from RM699.21 million.

MAHB said the drop in the net profit was due to the one-off gains recorded in the corresponding period last year in relation to the fair valuation of investment in GMR Hyderabad International Airport Ltd amounting to RM258.4 million and the gain on disposal of investment in GMR Male International Airport Pte Ltd amounting to RM28.2 million.

“Excluding the one-off gains, the group’s profit before tax increased by 31.1% or RM145.4 million compared to the corresponding period last year due to higher revenue from both airport and non-airport operations recorded during the period,” it said.

Meanwhile, revenue for the nine months’ period was up 7.5% YoY to RM3.87 billion from RM3.6 billion, underpinned by the growth in airport operations that is driven by sustained increase in passenger and aircraft movements.

MAHB said its network of airports including Istanbul Sabiha Gokcen International Airport (ISGIA) recorded 104.6 million passengers in the current period under review from Jan 1, 2019 to Sept 30, 2019, representing a growth of 5.1% over the corresponding period last year.

“During the same period, the group’s traffic for international passengers improved by 5.5% while traffic for domestic passengers increased by 4.8%.

“Correspondingly, the group’s aircraft movements improved by 3% with both international and domestic aircraft movements increasing by 3.9% and 2.4% respectively,” the filing read.

As for its Malaysian operations, MAHB said passenger traffic at its airports registered 6% in growth, with 78 million passengers in the current period under review.

“International passenger traffic registered a 2.3% increase to 39.4 million passengers and domestic passenger traffic increased by 10% to 38.6 million passengers,” it said.

The International Air Transport Association (IATA) in its June 2019 report foresees a lower passenger growth due to weaker economic growth and the expected increase in fuel price.

Consequently, IATA has revised downwards the forecasted 2019 global passenger growth by 1% to 5% and the Asia Pacific by 1.2% to 6.3%.

Moving forward, MAHB said the 2019 budgeted traffic numbers are realistically achievable with the positive average load factors recorded in the current quarter under review.

“The domestic traffic correction and consolidation are expected to continue until 1Q20, while the international sector could see further improvement.

“Nevertheless, challenges and uncertainties continue with respect to airline performance, competition in the domestic environment as well as the local and global macroeconomic outlook,” the airport operator said.

On its overseas operations, MAHB said ISGIA recorded 26.6 million passengers in the current period under review, representing an increase of 2.7% over the corresponding period last year.

“International passenger traffic increased by 19.5% while domestic passenger traffic decreased by 5.8%.

“ISGIA performance will likely maintain its growth momentum in 2019, especially for international passenger traffic,” it said.

Shares of MAHB closed 17 sen lower at RM8.22 at the end of yesterday’s trading, valuing the company at RM13.63 billion.