Malaysia Airports Q1 earnings surge to RM62m

The professional indemnity insurance policy submitted to MAHB was for a cover of RM3mil

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) saw its earnings surge in the first quarter ended March 31, 2017 (Q1 FY17), underpinned by the better performance of the Malaysian operations though its Turkey operations recorded greater losses.

Announcing its results on Friday, MAH said its earnings rose 264% to RM62.02mil from RM17.01mil a year ago. Earnings per share were 2.94 sen compared with 0.13 sen a year ago.

MAHB reported foreign currency gain of RM827,000 compared with the losses of RM163mil a year ago. There was also an unrealised gain on derivative financial instruments of RM3.91mil compared with losses of RM20.73mil a year ago.

Operating profit saw a 32.8% increase to RM269.61mil from RM202.94mil a year ago. At the topline, MAHB's revenue rose 7.3% to RM1.093bil from RM1.019bil. 

Group profit before taxation and zakat (PBT) rose 161.5% to RM99.9mil on-year due to the Malaysia operations. However, it was negated by higher loss before taxation from the overseas operations. 

Elaborating on the Malaysian operations, MAHB said PBT increased 77.9% to RM200.3mil.

“The favourable variance was mainly due to higher revenue, higher other income and lower total costs, by 9.5% or RM72.6mil, 17.3% or RM7.6mil and 1.0% or RM6.7mil respectively,” it said.

However, MAHB's overseas operations slumped deeper into the red. Loss before tax (LBT) was RM100.4mil – widening by 34.9% or RM26mil – from LBT of RM74.4mil a year ago. 

Its Turkey operations Istanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim Yapim ve Isletme A.S. (ISG)  and LGM Havalimani Isletmeleri Ticaret ve Turizm A.S. (LGM) reported losses. 

It cited that ISG and LGM reported higher LBT by RM25mil (Q1 2017: -RM44.5mil; Q1 2016:-RM19.5mil).

“This was prior to taking into account the loss of RM61.5mil (Q1 2016: RM57.8mil) recognised primarily due to the amortisation of fair value for the concession rights owing to the fair valuation exercise on the acquisition of ISG and LGM. 

“The unfavourable variance was mainly due to the increase in depreciation and amortisation and finance costs by 17.3% or RM12.4 million and 7.4% or RM8.5mil respectively,” it said. 

Elaborating on its revenue, MAHB said revenue from the Malaysia airport operations increased 8.8% to RM797.2mil on-year was due to the non-aeronautical revenue which increased 11% to RM386.6mil from RM348.2mil.

Higher passenger growth resulted in higher retail and rental revenues by 11.6% or RM21.2mil and 10.4% or RM17.2mil respectively. 

As for aeronautical revenue from Malaysia airports, it said there was an increase of 6.7% to RM410.7mil from RM384.8mil.

Passenger traffic for airports operated by MAHB in Malaysia increased by 10.5% to 23.4 million passengers from 21.2 million passengers. 

Both international and domestic passenger traffic increased by 12.0% and 9.0% respectively.

Passenger traffic at KLIA-Main Terminal increased by 30.4% (international:+27.9%, domestic: +38.9%) while passenger traffic at klia2 decreased by 0.3% (international:-0.3%, domestic:-0.5%). 

As for the overseas operations, MAHB said revenue from the airport operations dipped 0.2% to RM221.3mil from RM221.8mil – accounting for revenue from I stanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim Yapim ve Isletme A.S. (ISG)  and LGM Havalimani Isletmeleri Ticaret ve Turizm A.S. (LGM).

The unfavourable variance was due to lower aeronautical and non-aeronautical revenues. 

The passenger traffic for ISGIA for the current quarter under review decreased by 1.9% to 6.6 million passengers as compared to the corresponding quarter last year of 6.7 million passengers. Both international and domestic traffic decreased by 2.7% and 1.6% respectively. 
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