10 May 2011
Airport operator Malaysia Airports Holdings Bhd (MAHB) would likely see air passenger traffic volume grow at a slower pace between 7% and 8% this year, after posting a 12.7% growth last year driven by growth in international and domestic passengers.
Although MAHB recorded a 12% passenger volumes growth in the first quarter of this year, its passenger movement could soften in the coming quarters as full service carriers feel the effects of higher oil prices, said analysts.
“However, MAHB’s passenger growth is projected to remain relatively resilient as the airport should also capture the shift in passenger traffic from full service to low cost flights. We nudged down our passenger growth projection to 7% this year (from 8%) after taking into account the potentially adverse impact of higher fares – in view of high oil prices on travel demand,” HwangDBS Vickers Research said in a report mid last month.
The research house cut its financial year 2011 (FY11) forecast earnings by 6% mainly after downgrading passenger growth assumptions but expected higher rental income to mitigate the impact. It estimates a 13% earnings growth forecast for FY11.
“We understand that MAHB will rent out some commercial space at klia2 (the new permanent low-cost carrier terminal) immediately after the terminal opens in FY12, but the entire space would likely be fully rented out over time. Therefore, we imputed additional rental income from klia2 starting from FY12 (instead of FY13),” it added.
For 2010, the airport operator saw a total of 57.83 million passengers passed through its 39 airports in Malaysia, with growth in the international passenger movements outpacing the growth in domestic passenger movements at 21.3% and 5.6% respectively.
For the first quarter ended March 31, MAHB saw total passenger numbers grow by 12% to 15.05 million from 13.45 million a year ago. It posted a 12.4% growth to 8.92 million in Kuala Lumpur International Airport (KLIA) for the three month, from 7.94 million.
Meanwhile, Kenanga Research estimates passenger movement to grow by 8% this year. Its net profit forecast for FY11 is RM401mil against last year’s RM293.9mil.
“We also expect higher operating cost for its retail and rental division due to the gestation period of its newly expanded retail spaces in Main Terminal Building and LCCT. Completion of klia2 is expected in 2Q12. However, we do not see any earnings implication as the current LCCT’s capacity is sufficient, for the moment,” it added in an April report.
The research house said that after the seasonally slower first quarter, second quarter passenger traffic is expected to rebound in June due to school and public holidays in both Malaysia and Singapore,” it added.
MAHB will be releasing its first- quarter results this Thursday.
Source: The Star.
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