This article first appeared in The Edge Financial Daily on November 28, 2019

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) posted a 17.4% year-on-year (y-o-y) rise in net profit for the third quarter ended Sept 30, 2019 to RM197.87 million from RM168.49 million, on the back of higher revenue.

In a filing yesterday, MAHB said revenue for the quarter grew 10.2% to RM1.36 billion from RM1.23 billion, on the back of overall passenger growth of 6.7%. Earnings per share for the quarter rose to 11.05 sen from 9.28 sen.

For the cumulative nine months ended Sept 30 (9MFY19), MAHB’s net profit, however, fell 27.4% to RM507.53 million from RM699.21 million for the year-ago period, though revenue rose 7.5% to RM3.87 billion from RM3.6 billion.

MAHB said the decline in 9MFY19 net profit was due to one-off gains recorded for the corresponding period last year in relation to the fair valuation of investment in GMR Hyderabad International Airport Ltd, amounting to RM258.4 million, and a gain on disposal of its investment in GMR Male Private Ltd, amounting to RM28.2 million.

“Excluding the one-off gains, the group’s profit before tax increased by 31.1% or RM145.4 million compared to the corresponding period last year due to higher revenue from both airport and non-airport operations recorded during the period,” it said.

On its prospects, MAHB said for its Malaysian operations, with the positive average load factors recorded for the current quarter under review, the 2019 budgeted traffic numbers are realistically achievable.

In January this year, MAHB set a passenger growth target of 4.9%, with international and domestic passenger traffic growing at 2.4% and 7.6% respectively.

The airport operator said yesterday that the domestic traffic correction and consolidation are expected to continue until the first quarter of 2020, while the international sector could see further improvement.

“Nevertheless, challenges and uncertainties continue with respect to airlines’ performance, competition in the domestic environment as well as the local and global macroeconomic outlook,” it said.

On its overseas operations, MAHB said the Istanbul Sabiha Gokcen International Airport (ISGIA) recorded 26.6 million passengers for the current period under review, up 2.7% y-o-y.

“International passenger traffic increased by 19.5%, while domestic passenger traffic decreased by 5.8%. ISGIA’s performance will likely maintain its growth momentum in 2019, especially for international passenger traffic,” it said.

MAHB fell 2.03% or 17 sen to RM8.22 yesterday, with a market capitalisation of RM13.64 billion.