Monday, 30 July 2012

Malaysia Airport - 2Q12 within expectation


Period    2Q12

Actual vs. Expectations
 The 1H12 core net profit of RM239m came in within expectations and accounted for 56% and 50% of ours and the consensus’ full year FY12 forecasts respectively. 

Dividends   No dividend was declared for the period. 

Key Results Highlights
 For the YTD, MAHB recorded a 8% higher core net profit YoY to RM239m on the back of a 5% increase in passenger traffic. The higher growth in its core net profit as compared to the passenger traffic was mainly due to a higher PSC tariff.  

 1Q12 revenue of RM662m was 22% higher YoY due to a higher construction revenue recognised for the ongoing works for KLIA2 and Penang International Airport. The pre-tax profit was marginally lower by 1% due to a 27% increase in cost. The cost rise was however mitigated by the higher PSC tariff charge during the period.

 QoQ, the core net profit of RM117m was lower by 3% due to the higher depreciation, operational and staff costs.

Outlook   Sabiha Gokcen International Airport (“SGIA”) is still in a loss position and management expects it to only turn EBITDA-positive by 2016.

 MAHB is planning to inject an additional RM30m capital into SGIA but no decision has been finalised at this juncture.   

 The construction of KLIA2 is progressing within the time frame and is already 65% completed. 

 The response for the rental and commercial space in KLIA2 has been overwhelming since the first tender was issued out a few months back. The indicative rental rate is at RM40psf and MAHB is planning to increase the rate by 5% per annum.

Change to Forecasts
 No material changes in our forecast for FY12. However, we have toned down our SGIA forecast by extending its loss position from 2014 to 2016. There is no change to our earnings forecasts for the Malaysian-based business. 

Rating  MAINTAIN OUTPERFORM

Valuation    We have lowered down our Target Price slightly to RM6.45 (from RM6.50) as we had extended our loss assumption on SGIA from 2014 to 2016. 

Risks   (1) A longer-than-expected recovery time for MAS’ business turnaround and (2) a significant drop in AirAsia’s passenger numbers.      


Source: Kenanga

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