KUALA LUMPUR (Feb 26): For the first time in years, Malaysia Airport Holdings Bhd (MAHB) declared a full-year loss for the financial year ended Dec 31, 2020 (FY20) of RM1.12 billion, from a net profit of RM537.04 million a year ago, on plunging passenger movement caused by the Covid-19 pandemic, coupled with a sizable impairment of its Turkish airport concession rights.

In a bourse filing, the group said the impairment amounted to RM500.4 million, after an assessment was undertaken based on a review of the recoverable amount of concession rights of Istanbul Sabiha Gökçen International Airport (ISG) in Turkey, based on cashflow projections up to the end of the concession period in August 2032.

However, the losses were slightly offset by the recognition of deferred tax assets arising from investment tax allowance of RM246.5 million and from the losses in the current financial year.

MAHB reported 64.2% lower revenue of RM1.87 billion from RM5.21 billion a year ago after the pandemic caused large capacity cuts, travel bans and border closures worldwide, and a loss per share of 70.75 sen against earnings per share of 28.29 sen.

For FY20, the airport operator also said its Malaysia and Turkey operations had recorded a significant decrease in revenue by 90.1% to RM98.5 million and 55.5% to RM141.8 million respectively.

“Passenger traffic for the Malaysia operations contracted by 92.3% to 2.1 million passengers as compared to 27.3 million passengers recorded in the corresponding quarter in the prior year,” it said in the filing.

Meanwhile, passenger traffic for its Turkey operations contracted by 47.2% to 4.7 million passengers from 8.9 million passengers recorded in 2019.

According to MAHB, ISG contributed about 30% of MAHB group's revenue as at September last year. 

Meanwhile, the group also sank into the red in the fourth quarter ended Dec 31, 2020 (4QFY20) when it posted a net loss of RM685.02 million, from a net profit of RM29.51 million a year ago, as Covid-19 battered passenger movements.

In the filing, the group highlighted its revenue fell 80.4% to RM263.64 million against RM1.34 billion a year ago on the back of travel restrictions imposed by Malaysia and other countries.

Consequently, it posted losses per share of 42.16 sen compared with earnings per share of 0.91 sen previously.

The group also did not declare any dividends for the quarter. 

Moving forward, the group said with the aviation industry affected by the unprecedented travel restrictions and bans, MAHB had taken immediate and pre-emptive measures to mitigate its impact by implementing an aggressive cost optimisation plan.

“These measures include recalibrating operational efficiencies i.e. rebasing cost and prioritising capital expenditure to conserve cash reserves and ensure that the group is able to meet its financial and operational obligations.

“The group had also pared down non-essential operating costs with the aim of lowering [them] by at least 20%,” it said. 

MAHB added that with international borders still closed, most airlines are now focusing on enhancing local connectivity between the states, especially those with heavily frequented tourist destinations and business hubs. 

At noon break today, shares of MAHB settled eight sen or 1.32% higher at RM6.15, valuing the group at RM10.2 billion.