Quarterly Report For The Financial Period Ended 31 December 2022

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Condensed Unaudited Consolidated Statement Of Profit Or Loss for The Period Ended 31 December 2022

Condensed Unaudited Consolidated Statement of Financial Position As At 31 December 2022

Performance Review

4Q 2022 vs 4Q 2021 (Q-on-Q)

Revenue

The Group’s revenue for the current quarter increased significantly by 81.9% over the corresponding quarter in the prior year to RM1,002.8 million in tandem with the significant increase in passenger volumes for the Group, driven by further easing of travel protocols and further resumption of airline services and connectivity.

Revenue from airport operations increased significantly by 88.3% from RM492.6 million to RM927.5 million. Aeronautical segment revenue increased from RM268.8 million to RM544.4 million as compared to the corresponding quarter in the prior year on the back of traffic recovery with total passenger traffic of 25.8 million passengers for the Group as compared to 14.2 million passengers in the corresponding quarter in the prior year. Malaysia operations passenger traffic improved significantly to 17.5 million as compared to 6.7 million passengers in the corresponding quarter in the prior year. Türkiye operations continued to show passenger traffic recovery from 7.5 million to 8.3 million passengers during the same period. Non-aeronautical segment revenue increased from RM223.8 million to RM383.1 million, largely due to better contribution of commercial revenue from Malaysia and Türkiye operations.

Revenue from the non-airport operations increased by 28.3% or RM16.6 million from RM58.7 million to RM75.3 million due to higher revenue from the project and repair maintenance and hotel businesses.

Overall, Malaysia operations had recorded a significant increase in revenue by 157.3% from RM233.2 million to RM600.0 million. Whereas, Türkiye and Qatar operations recorded increase in revenue by 27.9% from RM293.7 million to RM375.6 million and 11.5% from RM24.4 million to RM27.2 million respectively.

(Loss)/profit before tax and zakat (LBT/PBT)

The Group registered a PBT of RM445.2 million in the quarter under review driven by higher revenue, reduction in utilisation fees and better share of results from joint venture and associates. In line with the higher revenue, the Group also registered an increase in cost due to higher user fees payable under the Operating Agreement and higher revenue share payable under ISG's concession, whilst other operational cost moderately increased to meet operational requirements with the increase in passenger traffic. Higher depreciation is in line with passenger traffic increase.

Malaysia operations LBT narrowed to RM61.1 million compared to LBT of RM193.7 million in the corresponding quarter in the prior year. Türkiye operations recorded higher profit of RM504.4 million as compared to LBT of RM22.3 million while Qatar operations recorded a PBT of RM1.9 million, higher than PBT of RM1.0 million recorded in the corresponding quarter in the prior year.

Share of results of Associates and Joint Ventures (JV)

In the current quarter under review, the share of results from associates recorded profits of RM16.2 million, higher by RM17.0 million as compared to a loss of RM0.8 million for the corresponding quarter in the prior year. Higher share of profits were mainly contributed by MFMA Development Sdn.Bhd. (MFMA), KAF and Alibaba KLIA Aeropolis Sdn. Bhd. (Alibaba KLIA Aeropolis) of RM14.8 million, RM2.4 million and RM0.7 million respectively. However, this was offset by the share of losses from Cooling Energy Supply Sdn. Bhd. (CES) of RM1.7 million.

Share of results of joint ventures in the current quarter under review recorded profits of RM4.7 million, higher by RM15.3 million as compared to a loss of RM10.6 million for the corresponding quarter in the prior year. Higher share of profit was contributed by Segi Astana Sdn. Bhd. (SASB) from a loss of RM13.0 million registered in the corresponding quarter in the prior year to RM2.1 million profit, and share of profit from Airport Cooling Energy Supply Sdn. Bhd. (ACES) of RM2.6 million as compared to RM2.4 million profit recorded in the corresponding quarter in the prior year.

Commentary On Prospects

MAHB network of airports recorded 83.9 million passenger movements in year 2022, marking the first full year of growing traffic towards recovery since the closure of border in March 2020. The recent announcement on China's reopening of borders provide optimism for a better growth in international sector in 2023 as traffic recovery growth could be accelerated with slots approvals in China. 17 airlines resumed services to 32 city pairs in 2022 with the highest traffic operated to Thailand, Indonesia, Philippines, South Korea, Vietnam, and India. The growth in passenger movements at airports in Malaysia were also supported by the introduction of new routes by 27 airlines to 38 city pairs. Among the city pair with the highest growth in 2022 over 2021 are Denpasar-Bali, Lahore, Ujung Padang, Male, Brisbane, Bangkok, Perth, Phuket, Batam and Bangalore. There were 59 airlines operating to 84 international and 35 domestic destinations at all airports managed by Malaysia Airports in Malaysia, compared to 48 airlines to 51 internationals and 32 domestic destinations in 2021.

Istanbul SGIA overall passenger movements also continued to register international passenger growth with the passenger mix ratio improving to 50.4:49.6 compared to 35.4:64.6 in 2021. This on-going structural change is a positive development in view of the capacity challenges. In addition, Pobeda Airlines resumed services to Moscow-Ynukovo with 8 flights weekly from 1 December 2022 which was suspended in March due to the Russia-Ukraine conflict.

The International Air Transport Association (IATA) in their December 2022 latest revision indicated that Asia Pacific and global passengers in 2023 are expected to reach 70.8% and 85.5% pre-2019 levels respectively. Airport Council International (ACI) forecasted Asia Pacific region full recovery will be by the end of 2024 as the air recovery still lags other regions in the world. ACI also forecasted global passengers for 2023 to reach 74% of 2019 level. The Malaysia Aviation Commission’s (MAVCOM) Waypoint Report issued in December 2022 forecasted passenger movements for 2023 to grow by 40% to 52% or between 74.6 million to 80.8 million passengers. The latest 2023 seat capacity filing for Malaysia just before China’s announcement shows a 44% increase over 2021 or reaching 76% of 2019 levels, while Istanbul SGIA shows a 4.2% increase. The positive development in seat capacity filings provides optimism that 2023 traffic is on course for a continuing recovery. The return of Chinese travellers followed by the reopening of China borders is expected to boost international traffic as China continues to lift bans and ease travel restrictions.

1. Group Initiatives

   MAHB is pivoting towards a propensity for growth, making concerted efforts in seeking out revenue generation and actively unlocking untapped opportunities to strengthen its financial position. In addition, MAHB continues to take pre-emptive measures in implementing cost optimisation plan as well as continue its cash conservation measures. These measures include recalibrating operational efficiencies i.e. rebasing cost, operational process flow review and prioritizing capital expenditure to conserve cash reserves to ensure that the Group is able to meet its financial and operational obligations.