Malaysia Airports Q2 earnings up 1% to RM101.75m (Update)

  • Business
  • Tuesday, 23 Jul 2013

KUALA LUMPUR: MALAYSIA AIRPORTS HOLDINGS BHD's (MAHB) earnings rose 1.07% to RM101.75mil in the second quarter ended June 30, 2013 from RM100.67mil a year ago, aided by construction profit.

The airports operator said on Tuesday its revenue rose 21.1% to RM978.15mil from RM807.81mil. Its profit before tax fell 6.6% to RM131.97mil from RM141.42mil a year ago.

It said construction profit in the second quarter rose 25.8% to RM16.81mil from RM13.35mil. Revenue rose 36.5% to RM386.74mil from RM283.35mil while costs increased by 37% to RM369.93mil from RM270mil.

If the construction profit was excluded, net earnings would have declined 2.7% to RM84.94mil from RM87.32mil.

The provision to include the construction profit was under the Interpretation 12: Service Concession Arrangements (IC 12) pertaining to service concession arrangements.

IC 12 includes accounting for "public-private" arrangements whereby a private sector operator involves in the construction / upgrading of infrastructure assets to be used in providing public service.

Under IC 12, the operator may provide construction services to the grantor in exchange for an intangible asset, that is a right to collect revenue in accordance with the operating agreements.

MAHB said the group estimated the mark-up used in calculating the fair value of the consideration receivables at an average of 4.5% and 7.5% on the cost incurred for klia2 and expansion to Penang International Airport, respectively and as such the contract revenue and contract costs associated with the construction contract is recognised as revenue and expense respectively by reference to the stage of completion of the contract activity at the balance sheet date.

For the first half ended June 30, 2013, its earnings rose 12% to RM227.81mil from RM203.41mil in the previous corresponding period. Revenue rose 36.8% to RM2bil from RM1.46bil.

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