18 December 2014
MALAYSIA Airports Holdings Bhd (MAHB) is poised for higher profits next year, with full earnings contribution from Kuala Lumpur International Airport 2 (klia2) and its 60 per cent-owned Istanbul Sabiha Gokcen International Airport, said a sectoral analyst.
RHB Research Institute regional transportation analyst Ahmad Maghfur Usman said Sabiha Gokcen airport holds much potential in terms of boosting MAHB’s earnings, where the airport is reportedly drawing investors with the fastest passenger growth in Europe.
According to Ahmad, Turkey had strong prospects in the past few years with double-digit compound annual growth rate, which is expected to remain.
“In term of cash basis, it has operationally been making money. For next year, there will be more passenger arrivals in Turkey, and MAHB expects significant improvement in operating profit,” he said.
MAHB had in late October announced a RM1.2 billion deal to buy an extra 40 per cent in Sabiha Gokcen, raising its stake to 60 per cent.
The airport operator recorded a net profit of RM85.64 million for nine months ended September 30 versus RM340.58 million net profit in the same period last year. Revenue was RM2.63 billion, compared with RM2.98 billion previously.
Ahmad said this year would have been a good year for MAHB, but because of the two airline tragedies and political unrest in Thailand, which put a dent in travel, the company suffered a decline in earnings.
MAHB also owns and manages two airports in India’s Hyderabad and Delhi, with 11 per cent and 10 per cent stakes, respectively. It also operates and manages 39 airports in Malaysia, with almost 90 per cent of its total income volume from Kuala Lumpur International Airport alone.
klia2, which can be a transit hub for Asia, receives 20 million passengers currently and has the capacity to handle 45 million passengers.
“There is room to grow the capacity by double at least, so it should provide a good home for carriers, such as AirAsia Bhd, to grow their businesses or fleet moving forward as well as other airlines too,” he said.
Ahmad said AirAsia has been a major driver to passenger growth for klia2 and MAHB definitely needs to work with other airlines to meet their needs.
Early this year, MAHB recorded 12 per cent growth in passenger traffic. However, it fell to six per cent in October.
For next year, Ahmad has forecast a six per cent growth in passenger volume for MAHB, assuming that no other tragedies would dampen travel plans.
Original Source: www.nst.com.my