Malaysia Airports Records Strong Growth In Revenue And Ebitda For 1h16 Driven By Resilient Growth In Passenger Numbers And Commercial Performance

Key Highlights 

• The Group registered RM2.0 billion in revenue, up 11.1% for 1H16 
• Normalised[1] Group EBITDA increased by 28.1% to RM870.2 million for the same period 
• 1H16 passenger traffic up by 4.2% to 56.3 million despite geopolitical challenges 
• New airlines include VietJet & Shaheen (KLIA), Jeju Air & Lucky Air (Kota Kinabalu), Hong Kong Airlines (Kuching) and Etihad (ISG) 
• Launch of RTS2020 charts the way forward for Malaysia Airports to be the Global Leader in Creating Airport Cities 

Sepang - Malaysia Airports Holdings Berhad ("Malaysia Airports" or "the Group") reported revenue of RM2.0 billion and earnings before interest, tax, depreciation and amortisation ("EBITDA") of RM870.2 million for the six months ended 30 June 2016 (“1H16”). Both the Group’s revenue and normalised EBITDA increased by 11.1% and 28.1% respectively when compared to the six months ended 30 June 2015 (“1H15”). The EBITDA achieved represented 50.7% of its annual EBITDA target for the full year ending 2016. This achievement was driven by the resilient growth in passenger numbers and commercial performance for both Malaysia and Turkey in spite of the recent global events which have posed some downside risks to air travel. 

With the combined operating performance of ISG, the Group’s system of airports handled 56.3 million passengers in 1H16, representing a 4.2% growth over 1H15. Normalised[2] profit before tax and profit after tax for the Group grew by 225.1% and 134.1% to RM55.7 million and RM25.1 million respectively over the same period.

Malaysia Operations

Passenger movements at the Group’s 39 airports in Malaysia stood at 42.1 million for 1H16, a 1.8% growth over 1H15. With KLIA, being the main gateway to Malaysia, recorded a 3.2% passenger growth for the period while other airports in Malaysia recorded an aggregate growth of 0.02%. The average load factor for the period increased by 2.5 percentage points indicating an inherent demand for air travel.

The Malaysia operations recorded revenue of RM1,499.0 million in 1H16, up by 10.8% over 1H15, as a result of higher quality aeronautical revenue growth and strong commercial performance. Factors that led to the increase in aeronautical revenue include more point to point passenger movements, consolidation of operations at Kota Kinabalu International Airport as well as the relocation of Malindo to KLIA Main Terminal while surge in traffic for the North Asia sector contributed to improved retail sales. Accordingly, normalised EBITDA for Malaysia operations rose by 35.9% to RM525.2 million. 

Overseas Operations

ISG’s passenger movements recorded robust overall growth of 12.0% to 14.2 million passengers in 1H16 over 1H15. Revenue from the Turkey operations grew by 14.6% to RM458.9million in 1H16 as compared to 1H15 while EBITDA rose to 16.2% on the back of the continued growth in passenger movements. Revenue from the operations in Doha, Qatar, slightly dipped by RM3.2 million to RM59.2 million during the same period.

Turkey Operations

While the recent geopolitical events in Europe and Middle East has posed some challenges to the aviation industry, Malaysia Airports remains confident of the long term growth prospects of its operations in Turkey. The economic fundamentals of the Group’s investment in Turkey remains strong with more focus on further revenue optimisation and operational efficiency to facilitate growth.

Malaysia Operations

The Group welcomed several notable airlines at its airports this year including VietJet and Shaheen Air at KLIA, Jeju Air and Lucky Air at Kota Kinabalu, Hong Kong Airlines at Kuching and Etihad Airways at ISG. This complements the introduction of new destinations and upgraded frequencies by the international carriers including increased frequencies by Emirates, Turkish Airlines and KLM at KLIA.  The Group anticipates that final passenger numbers for Malaysia would meet the estimated 2.5% growth based on the improvements in seat capacity for the second half of 2016 and improved load factors of 2.5 percentage points noted for 1H16.

Malaysia Airports launched its five-year business plan, Runway to Success 2020 (RtS2020), on 25 April 2016, charting its business direction for 2016 to 2020 with its ultimate goal of turning Malaysia Airports into a global leader in creating airport cities. Included in one of the four strategic priorities of RTS2020 is the KLIA Aeropolis development. With KLIA at its nexus providing excellent connectivity, KLIA Aeropolis provides an important link to a thriving regional market. It will also lay the perfect foundation for a cargo and aerospace ecosystem which will extend beyond the boundaries of KLIA Aeropolis. Several new strategic partnership agreements and intents for KLIA Aeropolis have been signed in recent weeks including with KL Airport Services, Raya Airways and Dnata, AirAsia Berhad and Global Turbine Asia.