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Kuala Lumpur, Kuala Lumpur, Malaysia

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Quarterly Report For The Financial Period Ended 30 September 2020

Financials Archive

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Condensed Unaudited Consolidated Statement Of Profit Or Loss for The Period Ended 30 September 2020

Income Statement

Condensed Unaudited Consolidated Statement of Financial Position As At 30 September 2020

Income Statement

Performance Review

Income Statement

3Q 2020 vs 3Q 2019 (Q-on-Q)

Revenue

The Group’s revenue for the current quarter declined significantly by 70.7% over the corresponding quarter in the prior year to RM396.7 million in tandem with the significant contraction in passenger movements of 74.8% due to the global impact of COVID-19 pandemic and prolonged Movement Control Order (MCO) period in Malaysia and other countries.

The impact of prolonged MCO period and border closures, has resulted in significant decline in revenue from airport operations by 72.6% to RM350.9 million. Revenue from the aeronautical segment decreased by 68.0% to RM228.6 million over the corresponding quarter in the prior year. Passenger traffic for the Malaysia operations contracted by 83.2% (international: -97.8%, domestic: -68.7%) to 4.5 million passengers as compared to 26.8 million passengers recorded in the corresponding quarter in the prior year. The passenger traffic for Turkey operations contracted by 52.5% (international: -73.8%, domestic: -37.3%) to 4.8 million passengers as compared to 10.1 million passengers recorded in the corresponding quarter in the prior year. Non-aeronautical segment decreased by 78.3% to RM122.3 million as compared to the corresponding quarter in the prior year.

Revenue from the non-airport operations decreased by 51.5% or RM35.6 million due to lower revenue from the project and repair maintenance and hotel businesses.

Overall, Malaysia and Turkey operations had recorded a decrease in revenue by 73.0% to RM253.6 million and 67.7% to RM121.2 million respectively. Qatar operations recorded a decrease in revenue from RM40.2 million to RM21.9 million.

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

The Group recorded a LBT of RM384.8 million as compared to PBT of RM246.8 million in the corresponding quarter in the prior year mainly due to the decrease in revenue by 70.7%. Group cost decreased by 31.9% due to lower operating cost driven by cost containment initiatives as well as other costs namely, user fee, depreciation and amortisation recorded during the period.

Malaysia and Turkey operations recorded LBT of RM232.1 million and RM154.1 million respectively as compared to PBT recorded in the corresponding quarter in the prior year. Qatar operations recorded a lower PBT of RM1.4 million as compared to RM3.2 million due to completion of a contract 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 losses amounted to RM6.1 million, lower by RM7.5 million as compared to the profits of RM1.4 million for the corresponding quarter in the prior year, due to higher losses from KAF and Cainiao KLIA Aeropolis Sdn. Bhd. (CKASB).

Share of results of joint ventures in the current quarter under review recorded losses amounting to RM4.1 million, lower by RM8.2 million as compared to the profits of RM4.1 million for the corresponding quarter in the prior year due to higher losses from Airport Cooling Energy Supply Sdn. Bhd. (ACES) and Segi Astana Sdn. Bhd. (SASB).


Commentary On Prospects

MAHB's network of airports recorded 36.2 million passengers in the current period under review from 1 January 2020 to 30 September 2020, a contraction of 65.5% over the corresponding period in the prior year. During the same period, the Group’s traffic for international and domestic passengers contracted by 73.6% and 58.2% respectively. Correspondingly, the Group’s aircraft movements decreased by 54.1% with both international and domestic aircraft movements decreasing by 64.6% and 47.0% respectively.

  1. Malaysia Operations

    Passenger traffic at MAHB operated airports contracted by 69.6% with 23.7 million passengers in the current period under review. Traffic for international and domestic passengers contracted by 76.4% to 9.3 million passengers and 62.7% to 14.4 million passengers respectively. International sector remained weak due to the international border restrictions. However, domestic passenger movements shown an improvement in September, partly driven by pre-election movements and leisure travel to Sabah, Kuching, Langkawi, Penang and Kota Bharu.

  2. Overseas Operations

    ISGIA passenger traffic contracted by 53.7% to 12.5 million passengers in current period under review. International and domestic passenger contracted by 63.2% and 47.6%, respectively. ISGIA surpassed 1 million mark per month after the ease of travel restriction in June 2020. As at to date, there are seven foreign airlines operating at ISGIA which are Air Arabia Maroc, Qatar Airways, Pobeda, Jazeera, Nile Air, Kuwait Airways and Salam Air.

  3. Outlook

    While international borders largely remained closed for the time being, 35 airlines are currently operating from Malaysia to 31 destinations in 23 countries, providing vital connectivity for the nation. The resumption of British Airways and Oman Air in the first week of October brought optimism in international air travel demand under a constrained environment. Meanwhile, the Group’s operations in Turkey continues to show strong momentum in its recovery trajectory. ISGIA was recognised as Europe’s fifth busiest airport in October with almost 500 daily flights. In October 2020, ISGIA had already achieved 61% of the October 2019 passenger traffic. Overall demand for global air travel is expected to show continued resilience, as it has done over the last few months with traffic recovery in the near term depending on effective measures and Standard Operating Procedures (SOPs), reinforced by airports and airlines measures and actions to ensure safety and security of passengers travelling by air.

    With the commencement of operations of the e-fulfillment hub at Cainiao Aeropolis Electronic World Trade Platform Hub, Malaysia in early November 2020, KL International Airport (KUL) is looking forward to further improved airline connectivity at the airport with the increase in flight frequency and capacity. The new facility is expected to help increase cargo volume by 700,000 metric tonnes, thus doubling KUL’s current volume to 1.4 million metric tonnes per year by 2029. Existing airline partners at KUL will also be able to enjoy new business yields by utilising their aircraft belly space with increased cargo volumes.

  4. Group Cost Optimisation Initiatives

    With the aviation industry affected by the unprecedented travel restrictions and bans, MAHB had taken immediate and pre-emptive measures to mitigate its impact by implementing an aggressive cost optimisation plan which will keep the Group relatively stable. The 18-month plan involves 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. The Group had also started to pare down non-essential operating costs with the aim of lowering it by at least 20%.