KUALA LUMPUR (Jan 5): Malaysia Airports Holdings Bhd (MAHB) expects its loss-making Istanbul Sabiha Gocken International Airport (ISGA) in Turkey to turn around in the financial year ending Dec 31, 2018 (FY18) — two years later than predicted.

In July 2016, its managing director Datuk Badlisham Ghazali had told The Edge Financial Daily in an interview that ISGA was expected to turn around its operations that year. However, ISGA continued to suffer losses on weak passenger traffic and higher effective tax charges due to write-off of expiring tax losses brought forward.

Badlisham said the improvement in financial performance for FY18 will be driven by the upcoming second runway and infrastructure around ISGA.

"The growth will be organic. Other than the upcoming second runway, passenger volume would be driven by infrastructure around the airport. One of it is the MRT system connecting ISGA, which increase the convenience and people may use more of the airport," he told a press conference on the group's business update and 2018 outlook today.

For the first nine months of 2017 (9MFY17), MAHB's overseas airport operation narrowed its loss by 49.61% to RM30 million from RM59.54 million in 9MFY16 on the back of a 6.27% growth in revenue to RM830.6 million, from RM781.58 million a year ago.

Badlisham also said MAHB remains keen to sell a stake in ISGA, but that it will retain control in the company.

"The answer is yes, in the short term, we are interested in [maintaining] a controlling stake in ISG. But in the long term, I can't speculate," he said, adding that about 10 parties have approached the airport operator expressing their interest to buy a stake in ISGA.

MAHB was part of a consortium that won a €1.93 billion contract to develop the Turkish airport in May 2008. The group had in 2014 raised its shareholding in ISGA to 60% by acquiring an additional 40% stake that was held by Indian partner GMR Infrastructure Ltd for €209 million. It bought the remaining 40% from Turkey's Limak Holding AS in 2014 for €285 million.

MAHB closed up 2 sen or 0.23% at RM8.80 today, with 2.67 million shares traded, bringing it a market capitalisation of RM14.6 billion.