SEPANG – Malaysia Airports Holdings Berhad (Malaysia Airports) held its 17th Annual General Meeting this morning at Sama-Sama Hotel KLIA. The AGM began with Malaysia Airports’ Chairman, Tan Sri Dato’ Sri Dr Wan Abdul Aziz Wan Abdullah welcoming Dato’ Sri Dr Mohmad Isa Hussain as a new Director on the Board of Malaysia Airports. At the same time, Tan Sri Dato’ Sri Dr Wan Abdul Aziz Wan Abdullah expressed his gratitude to Dato’ Siti Zauyah Md Desa, Dato’ Sri Dr Ismail Hj. Bakar and Datuk Ruhaizah Mohamed Rashid for their dedication and invaluable services to the Malaysia Airports’ Board during their tenure.
Financial Performance Overview
Malaysia Airports Holdings Berhad (“Malaysia Airports” or “Group”) recorded earnings before interest, tax, depreciation and amortisation (“EBITDA”) of RM1,679.1 million in the financial year ended 31 December 2015 (“FY2015”), up 113.4% (excluding the effects of IC Interpretation 12: Service Concession Arrangements (“IC 12”) ) from full year ended 31 December 2014 (“FY2014”), and above the KPI target of RM1,552.4 million that was set for the year. Strong revenue growth, primarily from airport operations in Turkey, boosted the EBITDA level.
Operating revenues recorded a remarkable growth of 44.3% from RM2,681.3 million to RM3,870.2 million. The higher operating revenues was mainly due to the consolidation of ISG’s revenues, and improvement in Malaysian airport and non-airport operations. The strong commercial performance in Malaysia operation is another contributing factor to the rise in revenue, despite the backdrop of weaker consumer spending sentiment. Commercial activities from rental and retail business contributed higher revenues of RM616.2 million and RM672.5 million respectively, in line with the full year impact of larger commercial space at klia2 in FY2015 vis-à-vis FY2014.
Malaysia Airports recorded a total passenger movement of 112.0 million passengers, improving by 4.7% from the previous year. The growth was most marked at ISG with overall passenger traffic of 28.3 million translating to a growth of 19.7% hence, retaining its position as the fastest growing airport in Europe. ISG recorded a growth of 23.6% and 12.8% for domestic and international passengers respectively.
Malaysian operations recorded a passive overall 0.6% passenger growth to 83.8 million passengers in FY2015. Domestic passengers grew by 1.2% to 43.7 million while international passengers declined marginally by 0.1% to 40.1 million passengers. This was partly contributed by the low confidence in consumer’s spending due to tough economic conditions and Malaysia Airlines being the main carrier in the country going through routes rationalisation exercise.
Meanwhile, total aircraft movements grew by 5.8%, with the domestic sector recording a higher growth of 6.4% compared to the international sector, which recorded a 4.8% growth.
Dividend
Malaysia Airports remains committed in enhancing shareholder value and hence, have in place a dividend payment policy of at least 50% of the Group's profit after tax and minority interest. For FY2015, the Board had announced an interim dividend of 4.00 sen amounting to RM66.4 million. A single tier final dividend of 4.50 sen was approved today by the shareholders at the AGM.
Malaysia Airports- The 2nd Largest Airport Operator by Passenger Movements
The year 2015 was an exciting year for Malaysia Airports upon the successful acquisition of ISG. Including the newly acquired Sabiha Gokcen International Airports and all 39 airports in Malaysia, Malaysia Airports is now the second largest airport operator group in the world in terms of number of passengers handled. In FY2015, the Group handled a total of 112.0 million passengers. This trend is expected to continue with the strong support of robust growth from ISG.
GLC Graduation Day
The year 2015 marked the graduation of Government-linked Investment Companies (GLICs) and Government-linked Companies (GLCs) including Malaysia Airports from the 10-year GLC Transformation Programme (GLCT) after a decade of transformation progress focused on enhancing financial performance, institutionalising good governance, and delivering broader, impactful contributions to national socioeconomic development. Over the past decade, Malaysia Airports’ shareholder return has been more than 500% and market capitalisation has grown more than six times over the same period.
Official Opening of Mitsui Outlet Park KLIA Sepang
As part of continuous effort in developing KLIA Aeropolis, Malaysia Airports has embarked on a project to develop Mitsui Outlet Park KLIA Sepang (“MOP KLIA”). This joint-venture project with Mitsui Fudosan Co. Ltd. (“Mitsui Group”) has attracted approximately 400,000 visitors a month to the factory outlet mall that offers collections of various genres including international luxury brands, local as well as Japanese brands. With ample land reserves around the factory outlet mall which currently has a total of 24,000m2 floor space, its future expansion for Phase 2 and 3 of up to 44,000m2 with approximately 250 stores will potentially make it one of the largest of its kind in the Southeast Asia region. The strategic partnership is the first major shareholding overseas development for Mitsui Group and will be the model for future KLIA Aeropolis development. The retail outlet park was officiated by the Prime Minister, Y.A.B. Dato’ Sri Mohd Najib Tun Abdul Razak on 29 July 2015.
RtS2020
On 25 April 2016, Malaysia Airports launched its five-year business plan, Runway to Success 2020 (“RtS2020”), mapping out its ambition of becoming a global leader in creating airport cities. RtS2020 encapsulated Malaysia Airports’ plans for the next five years to FY2020 under four main strategic priorities comprising 1) Establishing KLIA as a preferred ASEAN hub; 2) Improving total airport experience for all stakeholders, 3) The development of Malaysia Airports’ land bank under Aeropolis project; and 4) Increasing our international footprint.
The launch of the business plan sets a clear direction and showcases the commitment of the Board of Directors as well as the management of the company in enhancing its role as a key enabler to Malaysia’s economic growth.
ICAO and IATA have projected global passenger traffic growth of 6.3% and 6.9% respectively for 2016. For Asia Pacific, IATA forecast is a high 8.0% growth from 2015.
Air travel is a function of GDP, consumer and business sentiments, and overall macroeconomic factors. The lower fuel price may help to stimulate air travel demand in 2016 as profitability for airlines will increase and in turn, encourage increased seat offerings and lower fares. While uncertainty persists for the global economy, the outlook for Malaysia Airports is expected to remain healthy. Asia-Pacific continues to be the world's largest air travel sector with ASEAN having a population of more than 600 million and augmented by China and India with their extraordinary large population and economic growth.
Malaysia Airports continues to further develop KLIA’s capacity as a regional hub with seamless connectivity, and to boost the Group’s marketing efforts to attract new airlines. The return of British Airways, All Nippon Airways and Air China in 2015 and the extended code-share partnership between Malaysia Airlines and Emirates is a positive indication of continuing potential demand for air travel. Furthermore, the move by the Government of Malaysia to give Visa Free status to travellers from China and the implementation of eVisas will provide the added dynamism required by the industry in 2016. The Group also continues to collaborate closely with Tourism Malaysia to promote Malaysia as a vibrant tourist destination. Based on the prevailing factors, we expect 2016 passenger traffic for the Group’s Malaysia operations to record 86.0 million movements, or 2.5% above 2015 passenger numbers.
Malaysia Airports is also banking on stimulating economic activity through logistics, aerospace and MICE/leisure segments for the Group’s Aeropolis development, which will also serve as an engine for tourism growth. The Group’s Turkey operations growth remains robust as indicated by the recognition of being the fastest growing airport in Europe in FY15. Passenger traffic at ISG is expected to attain double digit growth in 2016.
Appreciation
Malaysia Airports concluded the AGM by thanking the Board of Directors, shareholders, airline partners, Government agencies, retailers, joint venture partners, vendors and suppliers for their continuous support in helping Malaysia Airports realising its ambitions and reaching even greater heights in the future.