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Kuala Lumpur, Kuala Lumpur, Malaysia

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Quarterly Report For The Financial Period Ended 31 March 2021

Financials Archive

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Condensed Unaudited Consolidated Statement Of Profit Or Loss for The Period Ended 31 March 2021

Income Statement

Condensed Unaudited Consolidated Statement of Financial Position As At 31 March 2021

Income Statement

Performance Review

Income Statement

1Q 2021 vs 1Q 2020 (Q-on-Q)

Revenue

The Group's revenue for the current quarter declined by 63.9% over the corresponding quarter in the prior year to RM336.9 million in tandem with the significant contraction in passenger movements of 76.9% due to the prolonged Movement Control Order (MCO) and interstate travel ban.

Revenue from airport operations declined by 66.7% to RM291.9 million. Revenue from the aeronautical segment decreased by 71.6% to RM142.6 million over the corresponding quarter in the prior year. Passenger traffic for the Malaysia operations contracted significantly by 90.8% (international: -96.6%, domestic: -85.3%) to 1.7 million passengers as compared to 18.4 million passengers recorded in the corresponding quarter in the prior year. The passenger traffic for Turkey operations contracted by 40.8% (international: -55.6%, domestic: -31.8%) to 4.2 million passengers as compared to 7.1 million passengers recorded in the corresponding quarter in the prior year. Non-aeronautical segment decreased by 60.2% to RM149.3 million as compared to the corresponding quarter in the prior year largely due to lower duty free revenue, lower commercial rental revenue impacted by sharp contraction of international passangers.

Revenue from the non-airport operations decreased by 19.8% or RM11.1 million due to lower revenue from the hotel and project and repair maintenance businesses.

Revenue from the non-airport operations decreased by 20.8% or RM12.7 million due to lower revenue from the hotel business.

Overall, Malaysia and Turkey operations had recorded a decrease in revenue by 75.2% to RM163.4 million and 39.5% to RM152.2 million respectively. Qatar operations recorded a slight decrease in revenue from RM22.0 million to RM21.3 million.

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

The Group recorded a LBT of RM280.5 million as compared to LBT of RM35.5 million in the corresponding quarter in the prior year in tandem with the decrease in revenue. However, the LBT was cushioned with the reduction in core operational expenses1 by 22% as compared to the corresponding quarter driven by the Group's continuous cost containment initiatives.

Malaysia operations recorded LBT of RM180.5 million as compared to PBT of RM0.8 million recorded in the corresponding quarter. Turkey operations recorded a LBT of RM100.8 million as compared to LBT of RM39.3 million whilst Qatar operations recorded a lower PBT of RM0.8 million as compared to PBT of RM3.0 million recorded in the corresponding quarter.

The higher losses however was cushioned with the recognition of deferred tax asset arising from the current period business losses. Accordingly, the Group recorded loss after taxation (LAT) of RM221.3 million.

Share of results of Associates and Joint Ventures (JV)

In the current quarter under review, the share of results from associates recorded losses amounted to RM0.8 million, lower by RM1.3 million as compared to the profits of RM0.5 million for the corresponding quarter in the prior year, due to higher losses from Alibaba KLIA Aeropolis Sdn. Bhd.

Share of results of joint ventures in the current quarter under review recorded losses amounting to RM1.4 million as compared to the profits of RM3.2 million for the corresponding quarter in the prior year due to losses from Segi Astana Sdn. Bhd. (SASB), mitigated by profits from Airport Cooling Energy Supply Sdn. Bhd. (ACES).


Commentary On Prospects

MAHB's network of airports recorded 5.9 million passengers in the current quarter under review from 1 January 2021 to 31 March 2021, a contraction of 76.9% over the corresponding quarter in the prior year. During the same period, the Group's traffic for international and domestic passengers contracted by 87.1% and 68.3% respectively. Correspondingly, the Group's aircraft movements decreased by 58.1% with both international and domestic aircraft movements decreasing by 75.1% and 63.8% respectively.

  1. Malaysia Operations

    Passenger traffic at MAHB operated airports contracted by 90.8% to 1.7 million passengers in the current quarter under review. Traffic for international and domestic passengers contracted by 96.6% to 0.3 million passengers and 85.3% to 1.4 million passengers respectively. International sector remained subdued due to the international border restrictions and domestic passenger movements which was due to re-imposition of the MCO effective 13 January 2021 in Malaysia.

  2. Overseas Operations

    ISGIA passenger traffic contracted by 40.8% to 4.2 million passengers in the current quarter under review. International and domestic passenger contracted by 55.6% and 31.8% respectively. ISGIA continued to show gradual recovery in traffic, particularly the domestic sector, following the relaxation of curfew which coincide with Turkey's vaccine rollout from January 2021.

  3. Outlook

    Traffic recovery would continue to rely on the efficacy of vaccine rollout and the extent of travel restrictions of which COVID-19 spread would be brought under control locally as well internationally. Digital health travel passes and a more synchronised travel procedures across countries may encourage cross border travel and support further travel recovery. Nevertheless, the prime initiator of air travel would be the level of control of the COVID-19 cases.

    IATA has projected 2021 global passenger volumes to improve by 56.5% over 2020, reaching 62% of pre-COVID levels. Airport Council International (ACI) meanwhile projected a baseline scenario of 72% growth for 2021 over 2020. The Malaysian Aviation Commission (MAVCOM) has estimated Malaysia's traffic growth for 2021 to be in the range of 94.2% and 100.3% with number of passengers between 51.7 million to 53.3 million.

    As a continuous effort to raise safety standards in curbing the COVID-19 pandemic, 6 airports (namely KLIA, Penang, Kota Kinabalu, Kuching, Langkawi and Subang Airport) are currently undergoing the Airport Health Accreditation (AHA) programme by the Airport Council International (ACI). ISGIA meanwhile, has already received the accreditation recently. The AHA is awarded based on health measures and procedures by the airports that are aligned with the industry's best practices in particularly with International Civil Aviation Organization's (ICAO) Restart Task Force guidelines. KLIA has also started disinfecting arriving baggages with the newly installed automatic ultraviolet (UV) disinfection system. This is one of the latest Airports 4.0 initiative expedited to ensure that airport safety remains at the highest level.

  4. Group Cost Optimisation Initiatives

    MAHB continues to take pre-emptive measures to mitigate its impact by implementing an aggressive cost optimisation plan. These measures include recalibrating operational efficiencies i.e. rebasing cost and prioritising capital expenditure to conserve cash reserves and ensure that the Group is able to meet its financial and operational obligations. As at 31 March 2021, the Group had achieved a reduction of 22% of the core operational expenses1 as compared to the corresponding quarter in the prior year.