Financial Discipline and Strong Traffic Momentum in 2021 Generates Positive Outlook for 2022
SEPANG – The Malaysia Airports Group has reported EBITDA of RM220.3 million for its financial year ended 31 December 2021 (FY21), a significant improvement compared to the negative RM1.2 million recorded over the same period last year (FY20). The significant improvement in Group EBITDA was largely due to financial discipline with core operating costs reducing by a further 11.2% or RM172.3 million in FY21 on top of the 26% or RM575.5 million reduction achieved in FY20.
Commendable air traffic recovery at its Turkish asset, Istanbul Sabiha Gokcen International Airport (ISG) in Turkey contributed towards reducing the impact of the COVID-19 pandemic on the Group’s earnings. EBITDA for the Turkey operations reported an increase of 110.3% to RM662.9 million, while the Malaysia and Qatar operations recorded an EBITDA of negative RM450.6 million and positive RM8.0 million, respectively. The Group also reported an operating cash flow surplus of RM262.9 million compared to a deficit of RM67.2 million in FY20.
The Group’s network of airports including Istanbul Sabiha Gökçen International Airport in Turkey recorded 36.1 million passengers in FY21. Although a contraction of 16.0% over the prior year, the Group is optimistic on seeing significantly improved air traffic performance in 2022. ISG’s traffic performance last year was already at 71.5% of its pre-COVID-19 level in FY19. The airport was also ranked as the sixth busiest in Europe last year for passenger movements by Airports Council Europe.
More substantially, the Group’s passenger traffic movements of 14.2 million for the final quarter of 2021 grew by 43.4% over the immediate preceding quarter including for its Malaysia operations where passenger traffic movements at its network of local airports grew 5.8 times in the same period. This recovery was the result of further relaxation in travel restrictions in both Malaysia and Turkey in tandem with the countries’ high vaccination rates among their population.
Specifically for Malaysia, demand arising from the Vaccinated Travel Lane programme with Singapore, and Umrah travel is expected to result in an increase in international passenger movements. The Group also views the impending re-opening of Malaysia’s borders and those of its key air travel markets within the region as a positive development. The ongoing commercial reset initiative at various airports in Malaysia will provide a fresh retail experience as well as new offerings for passengers, and is expected to improve rental yields for the Group moving forward. Similarly, the Group expects to see additional revenue from new land developments at KLIA Aeropolis and Subang Airport which will complement the recovery of aeronautical revenue and sustainability of the cost containment initiatives.