Friday 29 Mar 2024
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KUALA LUMPUR (May 31): Investors snapped up shares in Malaysia Airports Holdings Bhd (MAHB) in the afternoon trading session today, despite the release of lower quarterly earnings by the airport operator for its first financial quarter ended March 31, 2019 (1QFY19). 

MAHB's share price went up 22 sen or 3% to close at RM7.34, slightly below the day's high of RM7.39. Some 2.32 million shares were traded. The stock has declined 12.4% year to date. 

The share price weakness seems to have made MAHB a “screaming buy”, with 15 out of 20 analysts who track the group having placed it on their recommendation list, prior to the release of its 1QFY19 results during lunch break today.

MAHB's net profit came in two-thirds lower at RM149.58 million versus RM444.59 million a year ago, despite reporting a slightly higher revenue of RM1.25 billion versus RM1.215 billion previously. 

The sharply lower profit was partly due to the one-off gains recorded in last year's corresponding quarter, in relation to the fair valuation of the group's investment in GMR Hyderabad International Airport Ltd (GHIAL), which amounted to RM258.4 million, and a gain on the disposal of its investment in GMR Male Private Ltd (GMIAL) of RM28.2 million, MAHB said when announcing its financial results.

That said, higher expenditure has also eaten into its core profit. 

“Excluding the one-off gains, the group profit before tax decreased by 11.6% or RM21.5 million, as compared to the corresponding quarter last year, due to higher expenditure, mainly on utilities due to increase in tariff effective July 2018 and maintenance recorded during the period,” MAHB said in its stock exchange filing.

The higher expenses more than offset the revenue growth that came in on the back of a 3.7% growth in overall passenger count in the period under review. 

“MAHB’s passenger traffic growth was driven by the domestic sector, partly due to higher seat capacity offered by airlines to match air travel demand,” it said.

“International passenger volume remains consistent with [a] slight increase, although there are some signs of adjustments, partly due to aircraft utilisation, exit and entry in airlines operations on common routes and the temporary suspension of Firefly’s operation to Seletar, Singapore,” it added. 

Moving forward, future seat capacity filings by airlines “remain above expectations”, MAHB said. It is optimistic that the projected passenger growth of 4.9% in FY19 will be achieved. 

“The domestic traffic correction and consolidation is expected to continue, while the international sector may also see improvement,” it added. 

On overseas operations, MAHB expects its Istanbul Sabiha Gokcen International Airport in Turkey to maintain its growth momentum in FY19, particularly for international passenger traffic, after seeing a 3.8% increase in passengers to 8.1 million in 1QFY19, driven by a 20% growth in international flyers.

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