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Kuala Lumpur, Kuala Lumpur, Malaysia

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Quarterly Report For The Financial Period Ended 30 June 2021

Financials Archive

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Condensed Unaudited Consolidated Statement Of Profit Or Loss for The Period Ended 30 June 2021

Income Statement

Condensed Unaudited Consolidated Statement of Financial Position As At 30 June 2021

Income Statement

Performance Review

Income Statement

2Q 2021 vs 2Q 2020 (Q-on-Q)

Revenue

The Group's revenue for the current quarter increased by 18.8% over the corresponding quarter in the prior year to RM323.4 million due to higher passenger volumes in Turkey against the corresponding effect of full airport closure in April and May 2020 for Turkey operations.

Revenue from airport operations increased by 15.4% to RM275.4 million. Aeronautical segment revenue increased significantly from RM45.6 million to RM153.3 million as compared to the corresponding quarter in the prior year. Turkey operations showed signs towards normalisation as passenger traffic had increased from 0.6 million to 4.8 million passengers. Passenger traffic for the Malaysia operations improved to 1.3 million passengers as compared to 0.8 million passengers in the corresponding quarter in the prior year. The non-aeronautical segment revenue however decreased by 36.8% to RM122.1 million as compared to the corresponding quarter in the prior year largely due to absence of royalty and lower commercial rental revenue for Malaysia operations.

Revenue from the non-airport operations increased by 43.3% or RM14.5 million due to higher revenue from the project and repair maintenance, agriculture and hotel 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 had recorded a decrease in revenue by 43.2% to RM125.8 million. However, Turkey operations recorded an increase in revenue from RM35.1 million to RM176.3 million, whilst Qatar operations increase from RM15.5 million to RM21.3 million as compared to the corresponding quarter in the prior year.

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

The Group recorded an increase in LBT of RM290.5 million as compared to a LBT of RM268.3 million in the corresponding quarter in the prior year due to higher depreciation and amortisation, decrease in other income and marginal increase in operational expenses in the current quarter under review. However, the core operational expenses1 decreased slightly by RM0.2 million as compared to the corresponding quarter in the prior year. The marginal increase in LBT was however cushioned by the 18.8% increase in revenue and 7% decrease in finance costs.

Malaysia operations recorded a LBT of RM210.2 million higher as compared to LBT of RM107.5 million, whilst Turkey operations recorded a LBT of RM82.8 million lower than LBT of RM158.1 million recorded in the corresponding quarter in the prior year. Qatar operations recorded a higher PBT of RM2.5 million as compared to LBT of RM2.7 million recorded in the corresponding quarter in the prior year.

The Group's LBT was however mitigated by the recognition of deferred tax asset arising from the current period business losses. Accordingly, the Group recorded loss after taxation (LAT) of RM226.1 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 RM1.5 million, lower by RM0.5 million as compared to the losses of RM2.0 million for the corresponding quarter in the prior year. Lower losses was due to higher share of profit from KAF, offset by share of losses from Alibaba KLIA Aeropolis Sdn. Bhd (Alibaba KLIA Aeropolis), BP Malaysia Airports Subang Aerotech Sdn. Bhd. (BPMA Subang) and MFMA Development Sdn. Bhd.(MFMA).

Share of results of joint ventures in the current quarter under review recorded profits amounting to RM4.5 million, higher by RM4.2 million as compared to RM0.3 million for the corresponding quarter in the prior year due to higher share of profits from Airport Cooling Energy Supply Sdn. Bhd. (ACES) and Segi Astana Sdn. Bhd. (SASB).


Commentary On Prospects

MAHB's network of airports recorded 12.0 million passengers in the current period under review from 1 January 2021 to 30 June 2021, a contraction of 55.4% over the corresponding period in the prior year. During the same period, the Group's traffic for international and domestic passengers contracted by 72.9% and 41.7% respectively. Correspondingly, the Group's aircraft movements decreased by 41.7% with both international and domestic aircraft movements decreasing by 51.0% and 36.4% respectively.

  1. Malaysia Operations

    Passenger traffic at MAHB operated airports contracted by 84.4% to 3.0 million passengers in the current period under review. Traffic for international and domestic passengers contracted by 94.4% to 0.5 million passengers and 75.5% to 2.5 million passengers respectively. Malaysia passenger movements remain subdued due to the continuous interstate travel ban and international borders closure where travelling is limited to essential travellers only. The recent announcement made by the Government to allow some flexibility for fully vaccinated people to travel between states and allow for tourism activities within the same state is an early indication for a cautious traffic resumption.

  2. Overseas Operations

    ISGIA passenger traffic improved by 16.9% to 9.0 million passengers in the current period under review. International passenger contracted marginally by 3.6% and domestic passenger higher by 28.6%. Turkey showed signs towards normalisation with the easing of travel restrictions and partial curfews from 10 June 2021.

  3. Outlook

    Generally, 2021 would continue to be dominated by COVID-19 with some travel restrictions in place to contain the spread of pandemic along with efforts to ramp up inoculation of vaccines to reach herd immunity. The high record daily vaccine doses administered recently in Malaysia provide some optimism for traffic to re-start at least for the domestic sector traffic. In other regions of countries, there were some early signs of a cautious cross-border traffic arrangements, allowing vaccinated travellers to travel but still maintaining some standard safety measures including digital health pass and testing prior to departures or upon arrivals. A mutual and standard travelling protocols, digital health pass, while ensuring safety and comfort of passengers would facilitate the prospect for air connectivity re-start and cross-border travel.

    MAHB network of airports have constantly taken several measures to ensure the safety, service, and comfort of passengers. Recently, runway 1 of KLIA was fully rehabilitated and was given the full check mark to operate by the Civil Aviation Authority of Malaysia (CAAM) ahead any traffic recovery.

    The International Monetary Fund (IMF) in April had revised global economy growth forecast for 2021 and 2022 to 6.0% and 4.4% from 5.5% and 4.2% earlier announced in January 2021. Malaysia's GDP is forecasted to grow at 6.5% and 6.0% for 2021 and 2022. Bank Negara has forecasted that the Malaysian economy would register 6.0% to 7.5% in 2021. As most of the countries are moving towards achieving herd immunity, both Airport Council International (ACI) and International Air Transport Association (IATA) forecasted 2021 traffic to be slightly better than 2020 although still below pre-COVID level. ACI forecasted 2021 passenger traffic for global and Asia Pacific at -43.6% and -35.1% of pre- COVID level. IATA forecasted 2021 global traffic at -57% of pre-COVID 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 30 June 2021, the Group had achieved a reduction of 13% of the core operational expenses1 as compared to the corresponding period in the prior year.