KUALA LUMPUR (April 28): Malaysia Airports Holdings Bhd’s (MAHB) net profit for the first financial quarter ended March 31, 2017 (1QFY17) rose by over three times to RM62.02 million, from RM17.01 million a year ago.
 
Profit before taxation and zakat (PBT) meanwhile jumped by 161.5% or RM61.7 million to RM99.9 million in 1QFY17, thanks to contributions from its Malaysia operations.
 
However, this was negated by higher loss before taxation (LBT) from its overseas operations, MAHB said in a filing with Bursa Malaysia.
 
The group said its Malaysia operations posted a PBT of RM200.3 million, up 17.3% or RM87.7 million from 1QFY16. 
 
The favourable variance, it said, was driven by higher revenue (up 9.5% or RM72.6 million), higher other income (up 17.3% or RM7.6 million) and lower total costs (down 1% or RM6.7 million).
 
“The decrease in total costs was mainly due to the decrease in amortisation and depreciation by 31.3% or RM39.4 million, which was due to the extended amortisation and depreciation period, in line with the extension of the operating period from 25 years ending 2034 to an additional 35 years, ending 2069,” MAHB said. 
 
“However, this was offset against higher costs of inventories sold by 13.4% or RM13 million, increase in user fees by 13.4% or RM11.2 million, as well as repair and maintenance cost by 11% or RM5.8 million,” it added.
 
As for its overseas operations, MAHB said the segment posted a LBT of RM100.4 million, which was 34.9% or RM26 million higher than the RM74.4 million in LBT it recorded in 1QFY16.
 
On the deterioration, MAHB said its Turkey-based airports - Istanbul Sabiha Gökçen International Airport (SGIA) and LGM Havalimani Isletmeleri Ticaret ve Turizm - collectively saw their loss rise bya 37.3% to RM106 million, from RM77.2 million in 1QFY16.
 
Still, this was cushioned by higher PBT from Malaysia Airports Consultancy Services Middle East LLC (MACS ME), which doubled in 1QFY17 to RM5.6 million from RM2.8 million a year ago.
 
Meanwhile, MAHB’s 1QFY17 revenue grew by 7.3% to RM1.09 billion from RM1.02 billion, thanks to higher revenues from both its Malaysia and overseas operations.
 
The Malaysia segment contributed RM835.3 million to the overall group revenue, up 9.5% or RM72.6 million from RM762.7 million in 1QFY16, whereas the overseas operations contributed RM258.3 million, which was 0.6% or RM1.5 million higher than the RM256.8 million reported in 1QFY16. 
 
Moving forward, MAHB said the 6.5% growth rate target for airports in Malaysia (passenger traffic increase) is attainable, driven by the level of tourism interest in the country, which in turn is expected to increase as it hosts the Southeast Asian Games in August and September this year, as well as its participation in the Visit Asean@50 tourism campaign.
 
“Malaysia’s economy is forecast to grow between 4.3% and 4.8% in 2017, compared with 4.2% in 2016. The Malaysian based carriers, Malindo Air, AirAsia and Malaysia Airlines, are offering more seat capacity, reflecting a confidence in the industry outlook,” the group said.
 
Meanwhile, its network of airports recorded 30 million passengers in 1Q2017, an increase of 7.5% from 1Q2016, whereas international traffic grew by 9.5% to 13.8 million passengers, while domestic passengers rose by 5.9% with 16.1 million passengers.
 
“Correspondingly, aircraft movements improved by 1.3% with international and domestic increasing by 2.1% and 0.9% respectively,” it said.
 
As for its overseas operations, MAHB said passenger traffic at Istanbul SGIA declined in 1Q2017, whereby total passenger traffic was down by 1.9% y-o-y at 6.6 million passengers.
 
“International traffic declined by 2.7% with 2.1 million passengers, while domestic declined by 1.6% with 4.5 million,” it said.
 
“However, there are some positive developments in March for Turkey, which reflects an encouraging outlook for Istanbul SGIA’s traffic growth,” it added.
 
At 2.50pm, MAHB’s share price stood at RM7.54, with a market capitalisation of RM12.53 billion.