MAHB expects local travel to boost 4Q performance

By HARIZAH KAMEL / Pic MUHD AMIN NAHARUL

MALAYSIA Airports Holdings Bhd (MAHB) is optimistic of its fourth-quarter (4Q) results driven by anticipations of an upward trend in passenger movements if interstate travel is allowed. 

“In 4Q, hopefully with the opening up of Langkawi and interstate borders, we can see a bit of the momentum in terms of passenger traffic. That will cushion the impact from our losses and we hope that our losses will narrow in 4Q. 

“We took in a hefty impairment for Istanbul Sabiha Gokcen (ISG) which is about RM500 million, this year we do not anticipate any further impairment because ISG has actually shown a good recovery in terms of passenger traffic and performance,” MAHB CFO Mohamed Rastam Shahrom said in a virtual press conference yesterday. 

He said with the speedy vaccination rollout and gradual travel permission, the airport operator should be able to bounce back. 

“We can navigate through this crisis partly because during the half-year result, our cash in hand is about RM1.3 billion to RM1.35 billion, but there is a contingency line that we have secured from our five partner banks about RM1.35 billion that we can draw down anytime,” he explained. 

Group CEO Datuk Mohd Shukrie Mohd Salleh said international passengers remain key for MAHB to turn its profitability to what it used to see over the years. 

MAHB said it looks forward to the conclusion of the operating agreement which is pending the benchmarking of the regulated aeronautical charges by the Malaysian Aviation Commission. 

It is also waiting for the government’s approval of the Subang Airport Regeneration Plan and is 

hopeful for the implementation of international travel bubbles or green lanes without quarantine imposition based on global travel standards as practised in Turkey, Maldives, Dubai, Greece and Switzerland among others. 

MAHB is gearing up for air travel recovery with continuous efforts to ensure the safety of staff, passengers and airport environment while strengthening liquidity and containing costs, as well as expediting mission-critical projects. 

At the group’s 22nd AGM yesterday, chairman Datuk Seri Dr Zambry Abd Kadir said the group had remained resilient with strong liquidity and manageable borrowing level while containing costs at 36.3%. 

Mohd Shukrie said on top of focusing on improving its cash flow to pre-pandemic levels, MAHB is also preparing its airports and staff to be at the optimum 

level of operational efficiency to welcome passengers once restrictions are lifted. 

“We are seeing light at the end of the tunnel especially with the reopening of domestic tourism. With Langkawi as the pioneer destination of the domestic travel bubble, we are certainly looking forward to our airport operations to be in full swing again. 

For 2021, the group is focusing on key drivers comprising further reduction of costs against FY20, implementation of mission-critical projects, stabilisation of credit ratings, attainment of additional revolving credit facilities for contingency measures, proactive receivables management and engagement with customers. 

While the group anticipates domestic air travel recovery in Malaysia in the next few months, it remains motivated by the performance of its Turkish asset, ISG. 

For 1H21, ISG recorded 53% pre-Covid 19 total passenger movements and it is currently ranked as the fourth busiest airport in Europe by ACI. 

On another note, MAHB is in the middle of discussion with potential partners as it sets to expand its participation within the Malaysia air cargo industry. 

There are only three local operators at the moment in the cargo business namely Pos Aviation Sdn Bhd, Ground Team Red Sdn Bhd, MAB Kargo Sdn Bhd. 

He said the group is looking forward to completing the deal by next year at the very latest. 

“We expect the cargo volume to double in KLIA to 1.4 million by 2029 from the current 700,000. We are one of the key players by virtue of MAHB having 30% stake in the Cainiao Aeropolis eWTP Hub, which will entice any cargo operator to work with us,” he added.