SEPANG (July 30): Malaysia Airports Holdings Bhd (MAHB), which has been grappling with issues of sinking surfaces at klia2 since the RM4 billion terminal open for operations on May 2, 2014, will go ahead to turn the former low-cost carrier terminal (LCCT) into a global cargo and logistics hub.

AirAsia Bhd's corporate office currently remains at the old LCCT although its airline operations have moved to klia2 since May 9, 2014. The budget airline will move out once its new headquarters at klia2 is completed, which is slated by mid-2016.

"There have been no requests (from AirAsia to stay on at LCCT). It (deadline) has already been extended twice and now to the middle of next year," MAHB managing director Datuk Badlisham Ghazali told a news conference to announce the airport operator's financial results for the second quarter ended June 30, 2015 (2QFY15) this evening.

"We will go ahead (to turn the LCCT into a cargo complex) as planned," he added.

Badlisham also said MAHB cannot close down klia2 to address the differential soil settlement issue, adding that it only affects 1% of the apron taxiway at the new terminal.

"I apologise for the inconvenience. I will admit that these things are expected many years ago.

"Even if we did klia2 at one go, there will be some degree of settlement in the soil," he added.

On the status of construction works on AirAsia's new headquarters at klia2, Badlisham said he does not have the details and is not in a position to speak on the airline's behalf.

However, he believes that AirAsia has an "accelerated plan" to complete the project as planned by the middle of next year.

Badlisham also said MAHB has shortlisted two bidders for the tender to operate the proposed logistics hub, which will be awarded "soon".

Meanwhile, Badlisham said he remains optimistic the airport operator will revise upwards its current 85.8 million passenger movement target for 2015, a growth of 3% from 2014, before year-end. This is despite passenger movements at the KL International Airport falling by 1.6%, while other airports in Malaysia recorded an aggregate growth of 2.4% in the first 6 months of 2015 (1H15).

He added that MAHB is on track to achieve the 3% growth for both international and domestic passenger traffic.

Apart from the return of British Airways and ANA Holdings Inc, Badlisham said MAHB is to benefit from the arrival of another three new airlines by year-end.

MAHB reported a narrowed net loss in 2QFY15 to RM19.88 million or 3.2 sen loss per share from RM44.67 million or 3.39 sen loss per share a year ago, mainly due to the gain arising from its disposal of its 10% stake in Delhi International Airport Pte Ltd amounting to RM81.2 million.

Revenue was lower by 20% to RM939.96 million in 2QFY15 from RM1.18 billion in 2QFY14, mainly due to the absence of RM540.8 million construction revenue which was recognised for klia2 in 2QFY14.

Nevertheless, MAHB declared an interim dividend of 4 sen per share for the financial year ending Dec 31, 2015, payable on Aug 28, 2015.

For the six months period (6MFY15), MAHB reported a 85.4% decline in net profit to RM12.24 million from RM84.04 million in 6MFY14, while revenue fell 7.2% to RM1.82 billion from RM1.96 billion.

MAHB (fundamental: 1; valuation: 1.4) shares closed up 0.83% at RM6.05 today, bringing a market capitalisation of RM9.96 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)