1Q19 Key Highlights
• Revenue stood at RM1,252.3 million, 3.0% higher than 1Q18
• EBITDA for the Group stood at RM565.8 million with the Group also reporting net earnings of RM149.6 million
• Passenger traffic for the Group’s network of airports grew by 3.7% to 33.4 million passengers
• Partnership Agreements with Bousted Projects Limited and TP Aerospace Malaysia inked at the Langkawi International Maritime and Aerospace (LIMA) 2019
• Launching of the Langkawi International Tourism Promotional Fund (LITPF)
• MoU signing between Malaysia Airports and Tourism Malaysia for the Joint International Development Tourism Programme (JITDP)
SEPANG – Malaysia Airports Holdings Berhad (the Group) reported revenue of RM1,252.3 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of RM565.7 million for the financial quarter ended 31 March 2019 (1Q19). The Group’s revenue increased by 3.0% to RM1,252.3 million on the back of higher passenger growth. The Group’s also reported a profit before tax (PBT) and profit before tax (PAT) of RM164.6 million and RM149.6 million respectively.
With the combined operating performance of Istanbul Sabiha Gokcen International Airport (SGIA), the Group’s network of airports handled 33.4 million passengers in 1Q19, representing a 3.7% growth over the financial quarter ended 31 March 2018 (1Q18).
Operations Review
Passenger traffic for Malaysia operations grew by 3.9% to 25.4 million passengers in 1Q19. KLIA recorded a 1.0% growth in passenger traffic to 15.1 million passengers for the same period while other airports in Malaysia recorded an aggregate growth of 8.4% to 10.3 million passengers.
The Group’s Malaysia operations posted revenue of RM931.7 million in 1Q19, up by 2.6% over 1Q18. Revenue from aeronautical segments grew by 7.1% attributable to the strong overall passenger traffic growth mainly in airports other than KLIA. Non-aeronautical segment posted a negative growth due to lower rental and retail contribution as a result of the commercial reset initiatives in 1Q19. Core EBITDA for the Malaysia operations declined by 9.4% to RM350.1 million. The negative growth in earnings is primarily attributed the commercial reset initiatives and the increase in operating expenditure incurred in 1Q19 as the Group continues to enhance service levels and elevate customer experiences to cater to growing passenger traffic and increased service demands.
Istanbul SGIA recorded 8.0 million passengers in 1Q19, an improvement of 3.3% over 1Q18. Revenue from the Turkey operations for the same period rose by 2.6% to RM279.7 million while EBITDA for the period amounted to RM209.7 million or 11.4% higher than 1Q18. Revenue from the Group’s project and repair maintenance operations in Doha, Qatar also increased by 17.5% to RM40.9 million during the same period.
Outlook
The average load factors remained at a healthy level of 75.8% despite the 1.0 percentage points decline from the same period last year. Malaysia traffic growth was driven predominantly by the domestic sector, partly due to higher seat capacity offerings by airlines. Correction and consolidation are expected to continue while the international sector may see some improvement.
Istanbul SGIA’s traffic was driven mainly by the international sector and will likely maintain its growth momentum moving forward as some major airlines shifted their focus on international routes.
Commentary
As part of the Subang Airport Regeneration initiative, Malaysia Airports concluded two partnership agreements with Boustead Projects Limited and TP Aerospace Malaysia at the Langkawi International Maritime and Aerospace (LIMA) 2019. This commitment to uplift Malaysia as a preferred MRO hub is expected to attract investments worth RM1 billion and creation of 5,000 jobs within the next 5 years.
Separately at the same event, Malaysia Airports launched the Langkawi International Tourism Promotional Fund (LITPF), a RM5 million fund to facilitate the marketing and promotion of Langkawi. Earlier this year, Malaysia Airports also signed a Memorandum of Understanding with Tourism Malaysia for the Joint International Development Tourism Programme (JITDP) which looks into possible cooperation in international tourism promotion. Both parties will contribute up to RM10 million each for the JITDP.
Both the LITPF and JITDP funds will be made available to eligible industry players such as airlines, tour operators, travel agents and destination marketing companies. The LITPF and JITDP initiatives are among the various efforts by Malaysia Airports to boost international tourist and passengers' arrival into Malaysia through the Group’s network of airports.