The operator of Kuala Lumpur International Airport and the much-delayed KLIA2 low-cost terminal, has seen revenue in the first quarter of 2013 (ending March) fall by -24% to MYR 781.1m ($240.4m) from over a billion ringgit in the same period last year.
Despite the fall – due to construction revenue and costs associated mainly with KLIA2 – Malaysia Airports Holdings Berhad (MAHB), which runs a total of 39 airports in the country, generated increases in EBITDA and profits.
Earnings before interest, tax, depreciation and amortisation were up by +2.1% to MYR 257.9m ($79.4m) while profit after tax grew +1.9% to MYR 128.7m ($39.6m). The results have had little effect on the company’s share price
Non-aeronautical revenue grew +8.9% to MYR 286.1m ($88m) on the back of improved performance in the retail and rental businesses says MAHB. The company’s own retail business grew much faster at +14.3%, driven by increase in passenger volume and higher per head spending.
Revenue from rental of space, advertising and other commercial segments grew by +1.5% to MYR 101.0m ($31.1m) , helped by higher rental royalties resulting from the higher sales at KLIA.
MAHB attributes the increase in its overall operating revenue to its airport operations, driven by strong air travel demand, especially in Asia Pacific. The operator recorded passenger growth of +18.1% in Q1, easily outpacing the forecast passenger growth rate of +9.7% for 2014 as a whole.
A total of 20.6m passengers passed through MAHB’s airports in Q1 with international movements rising by +14.9%, lower than the domestic traffic increase of +21.5%. At the country’s main hub, KLIA (above), the Q1 rise was +16.4%, while other airports recorded strong aggregate growth in passenger movements of +20.8%.
NO FALLOUT FROM MH370
Looking ahead to the rest of 2014, MAHB says: “While it is premature to assess the impact on international arrivals after the MH370 incident, this is not expected to affect the positive growth of passenger numbers in the longer term.” Testimony to that is the higher than expected Q1 growth.
MAHB continues: “Furthermore, KLIA2 (right), which will commence operations on 2 May, is expected to be the catalyst in boosting MAHB’s performance in 2014, mainly contributed by KLIA2’s unique targeted retail and commercial offerings.”
But the airport warns that the dedicated low-cost terminal is likely to incur higher operating expenditure compared to the current LCCT, due to its much larger capacity which is designed to accommodate future growth.