KUCHING: Malaysia Airports Holdings Bhd (MAHB) reported a solid set of results for the first nine months of 2019 (9M19) but analysts believe its outlook remains cloudy due to uncertainties surrounding the Regulated Asset Base (RAB) framework.
Discussions on the Operating Agreements (OAs) with the government and the Regulated Asset Base (RAB) framework are still ongoing.
Qouting the research team at Affin Hwang Investment Bank Bhd (AffinHwang Capital), Borneo Post said there are still discussions on the possible adoption of Public-Private Partnership models to develop/manage the airports even though there might be possible delays due to some outstanding issues and the airlines need at least two months of advance notice to implement such significant changes in the PSC fee.
The research team at MIDF Amanah Investment Bank Bhd (MIDF Research also pointed out that there could be a lag in discussions as a new secretary general at the Ministry of Transport (MOT) was being appointed.
Nevertheless, it believed that there could be sufficient mechanisms for MAHB to recoup whatever charges and returns that would be set.
On MAHB’s third quarter of the financial year 2019 (3QFY19) MAHB recorded normalised earnings (after excluding one-off gains) of RM192.2 million, bringing its 9MFY19 normalised earnings to RM467.9 million (up 22.4 per cent y-o-y).
The 9MFY19 revenue (excluding construction revenue) rose by 7.5 per cent y-o-y, in-line with the overall 5.5 per cent y-o-y growth of passengers’ traffic in both Malaysia and Turkey for the period.
Looking ahead, it expected airlines to continue shifting capacity from the international to domestic sector at least until 1Q20.
As for its international traffic, the research team also as quoted in Borneo Post said although the international traffic did not grow as much as the domestic traffic 9MFY19, the international passenger traffic of 13.4 million recorded in 3Q19 was also the highest ever recorded on a quarterly basis in Malaysia.
All in, MIDF Research opined that the current momentum of passengers’ traffic combined with the start of Visit Malaysia Year 2020 will continue to provide a strong base for incremental revenue generation moving forward.
It believes that MAHB passenger numbers can surpass the 100 million mark in 2019, while maintaining a relatively conservative growth rate of 3.5 per cent which translates to RM102.5 million passengers.
Source: Borneo Post