KUALA LUMPUR: Given the more cautious economic outlook, Malaysia Airports Holdings Bhd (MAHB) anticipates its earnings before interest, taxes, depreciation and amortisation (Ebitda) for the financial year ending Dec 31, 2015 (FY2015) to be at RM1.52 billion with passenger traffic growing 3% to record 85.8 million movements.

For comparison, MAHB (fundamental score: 0.5; valuation score: 0.6) registered annual Ebitda of RM899.66 million for FY2013, a drop of 3.24% from RM929.74 million in FY2012, according to announcements with Bursa Malaysia.

As for its nine months ended Sept 30, 2014, MAHB registered Ebitda of RM648.4 million. During the period, it achieved a net profit of RM85.64 million, a decrease of nearly 75% from RM340.58 million a year earlier due to higher costs. Revenue came in 11.6% lower at RM2.63 billion as compared with RM2.97 billion in the previous corresponding period.

The airport operator will release its full-year results for FY2014 by end-February.

The group has revealed in its headline key performance indicators (KPIs) statement with Bursa Malaysia that its Ebitda KPI of RM1.52 billion was based upon the consolidation of its Turkish operations under Istanbul Sabiha Gokcen Ulus (ISG) and LGM Havalimani Isletmeleri Ticaret ve Turizm AS lararasi Havalimani Yatirim, Yapim ve Isletme AS (LGM).

The increase in Ebitda will also be complemented by the impact of full-year retail and commercial operations at klia2 along with higher passenger movements, said MAHB.

The airport operator noted that there is room for further optimism about 2015, being the Malaysia Year of Festivals as well as the return of British Airways to Malaysia.

It reasoned that the recent drop in fuel price might help stimulate air travel demand in 2015 as profitability for airlines would increase and in turn, encourage increased seat offerings and lower fares.

Preliminary traffic results indicate airports operated by MAHB locally handled 83.3 million passengers in 2014, a 4.7% increase on the back of the 18.4% growth achieved in 2013, it said.

International passenger movements achieved a growth of 4.9% while domestic passengers recorded 4.5% growth over 2013. Aircraft movements registered a 7.3% increase whereas cargo movements recorded 8% growth over 2013.

Globally, MAHB said that the Airports Council International, International Civil Aviation Organization and International Air Transport Association have projected global passenger traffic growth of 4.7%, 6.3% and 7.0% respectively for 2015.

Meanwhile, MAHB said ISG’s passenger movement is expected to grow by 15% in 2015.

Aircraft movements are expected to register a 13% growth while cargo movements would likely experience a 5% growth over 2014. It had completed the acquisition of the remaining 40% equity stake in ISG and LGM on Jan 2, for €279.23 million (RM1.137.65 billion).

MAHB’s share price dropped 1.64% to RM7.18 yesterday, translating into a market capitalisation of RM9.89 billion.

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. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in The Edge Financial Daily, on January 28, 2015.