SEPANG – Malaysia Airports Holdings Berhad ("Malaysia Airports" or "the Group") reported earnings before interest, tax, depreciation and amortisation ("EBITDA") of RM452.6 million for the three months ended 31 March 2016 (“1Q16”), representing an increase of 12.2% when compared to the corresponding period in 2015. The EBITDA achieved represented 26.4% of its annual EBITDA target for the full year ended 2016. This achievement was driven by a healthy revenue growth of 16.4% to RM1,019.5 million primarily arising from the Group’s Turkey operations, Istanbul Sabiha Gökçen Uluslararasi Havalimani Yatirim Yapim Ve Isletme A.S. ("ISG") and LGM Havalimani Isletmeleri Ticaret ve Turizm A.S. ("LGM"), as well as a stronger commercial performance in Malaysia.
Group Performance
Total revenue for the Group of RM1,019.5 million in 1Q16 was attributable to the improved results from the airport operations segment, consisting of aeronautical revenue which grew 19.5% and non-aeronautical revenue with improvement of 12.9%. In total, airport operations segment from both ISG’s and Malaysia’s operations increased by 16.3 % to RM954.7 million. Meanwhile, revenue from the non-airport operations segment grew by 17.6% to RM64.8 million, largely due to income from facilities management works contract at Hamad International Airport, Doha.
With the combined operating performance of ISG, the Group’s system of airports handled 27.8 million passengers in 1Q16, which represent a 6.9% growth over the corresponding period in 2015. Similarly, aircraft movements grew 1.8% to 249,725 movements in 1Q16.
Malaysia Operations
Passenger movements at the Group’s 39 airports in Malaysia stood at 21.1 million for 1Q16, a 3.4% growth over the three months ended 31 March 2015 (“1Q15”). Domestic passenger movements grew by 1.0% to 10.7 million passengers while international passenger movements improved by 6.0% to 10.4 million passengers despite a 2.6% decline in aircraft movements. KLIA, being the main gateway to Malaysia, recorded a 4.3% passenger growth for the first quarter while other airports in Malaysia recorded an aggregate growth of 2.0%.
Malaysia Airports recorded revenue of RM794.9 million for its Malaysia operations in 1Q16, representing an increase of 14.5%. The increase was credited to the strong commercial performance despite the backdrop of weaker consumer sentiment. Rental revenue for commercial segment increased by 9.0% to RM164.7 million and retail increased by 15.7% to RM183.5 million, in line with the gradual return of passengers from China sectors. Aeronautical revenue on the other hand increased by 15.7% to RM384.8 million in 1Q16, mainly contributed by Passenger Service Charges (“PSC”) collections. Excluding a
one-off unrealised gain on foreign exchange of RM63.5 million in 1Q15, EBITDA for the Malaysia operations rose by 32.9% to RM284.2 million.
Turkey Operations
ISG’s passenger movements recorded strong double-digit growth for both domestic and international sectors by 23.6% and 12.1% respectively, achieving an overall growth of 19.6% to 6.7 million passengers in 1Q16, thus retaining its position as the fastest growing airport in Europe. Overall aircraft movements rose 23.9% to 50,842 movements. ISG’s airport operations revenue grew by 24.0% to RM221.7million in 1Q16, boosted by the robust growth in passenger movements while revenue from its commercial arm LGM had risen by 3.4% to RM27.3 million.
Industry
We remain optimistic to meet our 2016 passenger traffic growth target of 2.5% for Malaysia’s operations and 10.8% for ISG’s operations. It is also likely that the seat capacity offerings will improve from the third quarter onwards.
With the recent announcement of Malaysia Airlines’ code sharing with Emirates and its improved positions coupled with other positive factors such as the shift of Malindo Air to KLIA and the expectation to codeshare and interline with other foreign carriers, the second quarter is expected to be better for Malaysia Airports.