SEPANG: Malaysia Airports Holdings Bhd (MAHB) has been pre-qualified to bid for the contract to operate and manage the King Abdulaziz International Airport (KAIA) in Jeddah, Saudi Arabia, which is currently being expanded and upgraded, said managing director Datuk Mohd Badlisham Ghazali (pic).
“This is a services contract [from Saudi Arabia’s General Authority of Civil Aviation], where we are tendering to be the operator of the airport. The scope is bigger than the New Doha [International Airport],” he told reporters after the group’s annual general meeting yesterday.
He added that the value of the contract has not been finalised, and that there is no indication of when the tender result will be announced. The KAIA expansion project is expected to be completed by the end of this year.
Last month, MAHB (fundamental: 1.15; valuation: 1.4) had announced that its unit Malaysia Airports Consultancy Services Middle East LLC had secured a three-year contract worth RM23.58 million for the provision of facility management services at the New Doha International Airport on March 31. The scope of work includes maintenance of civil engineering facilities, structures and roadways.
Meanwhile, Mohd Badlisham said certain decisions have been made regarding the relocation of AirAsia Bhd’s operation at the Kota Kinabalu International Airport (KKIA), but declined to disclose what they are, except to say that he will let the government make the announcement.
“We were told that they (AirAsia) had a meeting with the KSU (secretary-general) of the Ministry of Transport recently, [and that] there were some decisions made,” Mohd Badlisham said.
AirAsia (fundamental: 0.2; valuation: 0.8) was asked to relocate its operation from Terminal 2 to the renovated Terminal 1 in KKIA by Jan 1, but the budget airline has opposed the move, saying that passenger service charge at the new terminal (RM65) would be much higher than that at Terminal 2 (RM32).
Deputy Transport Minister Datuk Abdul Aziz Kaprawi said last month that the government would soon set a new date to move AirAsia’s operations to Terminal 1, and that the government was still in discussion with the carrier on the relocation as the latter had made several requests before proceeding with the move.
Mohd Badlisham also said the review of klia2’s construction will be completed by the end of this month, which will finalise the claims and counterclaims against the airport’s main contractor — the UEM Construction Sdn Bhd and Bina Puri Sdn Bhd joint venture.
“We have issued the CPC (certificate of practical completion) in January, and we are reviewing the claims and counterclaims, and will present the review [results] to the board,” he said.
Last year, MAHB had sought compensation by imposing liquidated ascertained damages on the contractor for the delay in the opening of klia2.
Yesterday, MAHB also announced its results for the first quarter ended March (1QFY15). Net profit plunged 74.69% to RM32.58 million or 1.28 sen a share from RM128.71 million or 10.19 sen a share a year ago, mainly dragged down by finance cost. MAHB’s finance cost surged over 22 times to RM159.91 million in the quarter under review, from RM7.26 million a year ago.
Revenue was RM876.18 million in 1QFY15, 12.18% higher than the RM781.08 million in 1QFY14, driven by its non-aeronautical business, which includes the leasing of commercial spaces, management and operations of airport parking facilities, advertising business, the Airside Transit Hotel and the Sama-Sama Hotel operations.
MAHB shares closed up 5.74% at RM6.82 yesterday, bringing a market capitalisation of RM11.2 billion, while AirAsia’s share price ended the day 1.32% lower at RM2.24 with a market cap of RM6.35 billion.
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This article first appeared in The Edge Financial Daily, on May 6, 2015.