2 June 2022
Malaysia Airports Holdings Bhd (MAHB) has indicated that the revision of the operating agreement (OA) as well as the land lease agreement that it is currently negotiating with the government is in the final stage to be concluded.
“We are at the very end of finalising [the agreements], not only the OA, but also the land lease [agreement]. As soon as we get that, we will be able to publish it out to the public,” said MAHB managing director Datuk Iskandar Mizal Mahmood at a virtual press conference after the annual general meeting.
“We certainly hope that the new OA will be able to provide us with an upside to our shareholders,” he added.
The current OA allows MAHB to run the 39 airports including Kuala Lumpur International Airport (KLIA) and klia2 in Sepang until 2069.
Previously, an analyst said the new OA could be a structural rerating catalyst for MAHB, as the airport operator would benefit from an increase in aeronautical tariffs.
“Another positive is with respect to the KLIA Aeropolis, which is the 8,500-acre land area surrounding KLIA and klia2. MAHB has already negotiated the terms of the new development agreement and land lease agreement (DA-LA) that will permit future development of the aeropolis to be on 99-year lease terms commencing from the date of the development, rather than to be constrained by the end of the current concession agreement in 2069F,” a CGS-CIMB analyst said in a note dated Jan 19, 2022.
MAHB gears up to turn around business
MAHB, which recorded two straight years of losses, is all geared up to turn around its business amid air travel recovery.
“Number one, from our first-quarter results, you see that trajectory is on the right path. Our passenger numbers also showed an upward trajectory. We have also brought down our core costs significantly. So right now, I think we’re almost there in terms of breaking through that particular barrier if we’re talking about profitability coming back into breakeven or making a profit.
“Now, of course, there are a lot of things that still need to be done. However, after suffering two years of a difficult environment, this year, MAHB is all geared up in terms of making sure that works towards a singular objective, and that is to basically bring us at the very least out of the negative territory, if not doing better than that,” said Iskandar Mizal.
MAHB has previously noted that its passenger movements of 14.7 million recorded in the first quarter ended March 31, 2022 (1QFY22) is the highest since the Covid-19 outbreak was declared as a global pandemic on March 11, 2020.
Thanks to improved passenger volumes, the airport operator reported a net loss of RM104.76 million for 1QFY22, a 52.66% decrease from RM221.3 million last year. Revenue for the quarter surged 69.44% to RM570.85 million as compared to RM336.91 million a year ago, its bourse filing showed.
The group added that the increased passenger volumes were driven by further easing of travel restrictions and quarantines, reopening of borders via vaccinated travel lane (VTL) arrangements with several countries and the gradual transition to an endemic phase.
Marred by the Covid-19 pandemic which restricted the air travel movement, MAHB posted a net loss of RM1.12 billion in FY20 and RM766.4 million in FY21.
Shares in MAHB settled seven sen or 1.05% higher at RM6.72, giving the group a market capitalisation of RM11.02 billion. Year-to-date, the stock has gained 12.56% from RM5.97 on Jan 3.
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