Key FY2019 Highlights
- Group revenue stood at RM5,213.1 million, 7.4% higher than FY2018
- Core EBITDA for the Group increased by 9.3% to RM2,292.0 million
- Core net earnings grew 21.9% to RM537.0 million
- Passenger traffic for the Group’s network of airports grew by 5.6% to 140.6 million passengers
- Malaysia Airports’ Board of Directors recommends a final dividend of 10.0 sen per share for FY2019
- Twenty (20) foreign airlines and sixty-four (64) international city pairs registered double-digit growth
- Remains cautious of the challenging operating environment due to impact of Covid-19
SEPANG – Malaysia Airports Holdings Berhad (the Group) reported revenue of RM5,213.1 million and core earnings before interest, tax, depreciation and amortisation (EBITDA) of RM2,292.0 million for the financial year ended 31 December 2019 (FY2019).
The Group’s revenue increased by 7.4% to RM5,213.1 million largely attributed to the encouraging operational performance both in Malaysia and Turkey. Excluding the effect of non-core gains for the financial period ended 31 December 2018 (FY2018), EBITDA increased by 9.3% to RM2,292.0 million while net earnings improved by 21.9% to RM537.0 million over the same period.
With the combined operating performance of Istanbul Sabiha Gokcen International Airport (ISG), the Group’s network of airports handled 140.6 million passengers in FY2019, representing a 5.6% growth over FY2018.
The Board of Directors recommends a final dividend of 10.0 sen per share for FY2019. Together with the earlier interim dividend of 5 sen per share, the total dividend for the year is 15.0 sen per share (FY2018: 14 sen per share).
Operations Review
Passenger traffic for Malaysia operations grew by 6.1% to 105.2 million passengers in FY2019. KL International Airport (KLIA) recorded a 3.9% growth in passenger traffic to 62.3 million passengers for the same period while other airports in Malaysia recorded an aggregate growth of 9.5% to 42.8 million passengers.
The Group’s Malaysia operations posted revenue of RM3,921.5 million in FY2019, grew by 6.1% over FY2018. Revenue from both aeronautical and non-aeronautical segments grew by 10.9% and 2.0% respectively. The improvement in aeronautical revenue is mainly attributable to the strong passenger movements, especially for airports other than KLIA which recorded a growth of 9.5%. Owing to the stronger revenue, core EBITDA for the Malaysia operations rose by 8.7% to RM1,330.8 million.
ISG recorded 35.5 million passengers in FY2019, an improvement of 4.1% over FY2018. Revenue from Turkey operations for the same period rose by 18.7% to RM1,291.6 million while EBITDA for the period amounted to RM961.2 million or 10.1% higher than FY2018.
Outlook
The Ministry of Finance has revised its forecasted GDP growth between 3.2% and 4.2% for Malaysia in 2020. The widening of Corona Virus Disease 19 (COVID-19) is expected to impact the travel and tourism sector and possess a downside risk to the world economy in the short term. In the interim, the COVID-19 is expected to have an adverse impact to passenger traffic growth. Recovery is expected to be gradual with the return of confidence to travel and the containment of COVID-19. We foresee passenger traffic will recover the lost ground in the medium to long term as there is latent demand for travel based on average high load factors. In addition, the Visit Malaysia Year 2020 may to a certain extent cushion the adverse impact from COVID-19, provided confidence for air travel returns in the next few months. Historically, during normal Visit Malaysia Years, the international traffic growth had been commendable with double-digit growth.
Istanbul SGIA is expected to consolidate its international traffic further, while some moderation in the decline of the domestic passengers is foreseen for 2020. This on-going structural change is a positive development in view of the capacity challenges at Istanbul SGIA in the immediate term. However, airlines are projected to continue raising their load factor growth in 2020, with Istanbul SGIA still currently able to accommodate such growth with its existing runway and terminal capacity.
Malaysia Airports takes cognisance of the current market conditions, remaining cautious of the challenging operating environment. The Group has put in place mitigation plans to weather through the impediments. Malaysia Airports will ensure the continuity of its operations with resilient and agile business strategy in place.
Commentary
On 13 August 2019, Malaysia Airports reached another momentous milestone where its crown jewel KL International Airport (KLIA) celebrated 21st anniversary as the country’s leading gateway. Being the custodian and operator of KLIA, Malaysia Airports vows to continue KLIA’s legacy by pursuing service excellence through digitalisation initiatives that are part of the Airports 4.0 transformation journey.
Beginning of the year, Malaysia Airports kickstarted the Single Token Journey concept at KLIA, a pilot project which utilises facial recognition technology that allows passenger with a single identification verification through the entire airport touchpoints from check-in to the boarding gate. This is a journey embarked by Malaysia Airports to transform KLIA into a smart airport using the latest updated technology and big data analytics. Harnessing sophisticated technology into the airport system resulting simplification of process will help to reduce check-in time and improve passengers experience in the airport.
As part of its top priority and commitment in improving passengers experience, early this year klia2 completed a reconfiguration exercise to cater for the expansion of immigration counters at the international arrival hall. The newly revamped area will now be able to handle double its previous capacity for a smoother passenger flow. This is a testimony that Malaysia Airports continues to strive to provide joyful experience for the guests, living up to its Caring Host culture.
The year 2020 proffers great opportunities and Malaysia Airports is fully committed to continue its crucial role in leading the aviation industry and facilitating the economic aspirations of the country. Malaysia Airports will continue its efforts and endeavours to deliver world-class service qualities to its stakeholders by embedding a customer-centric culture in airport operations.