Analysts cut MAHB’s forecast as FY18 results miss expectations
KUALA LUMPUR: Malaysia Airports Holdings Bhd’s (MAHB) financial year 2018 (FY18) core net profit (CNP) of RM361.2 million came below expectations, leading analysts to cut their forecast of the airport operator’s FY19 CNP.
In a report, the research team at Kenanga Investment Bank Bhd (Kenanga Research) noted that the negative variance mainly stems from the escalation of operating cost in the fourth quarter of 2018 (4Q18), as MAHB’s management steps up their maintenance effort for both KLIA and KLIA2.
It also pointed out that MAHB’s management released its FY19 headline KPIs targeting an earnings before interest, tax, depreciation, and amortisation (EBITDA) of RM2,163.3 million with Malaysia’s EBITDA flattish at RM1,210.1 million compared with FY18.
It added that this was despite targeting passenger growth of 4.9 per cent in Malaysia coupled with an expected increase in PSC charges upon signing of the new operating agreement as management intends to incur more operational capex in for the maintenance for KLIA and KLIA2 in order to meet the QoS set by MAVCOM.
That aside, MAHB’s management also indicated that Penang Airport is currently at 20 per cent above its original capacity and a capacity upgrade/expansion is imminent in the near future followed by KLIA.
“Post results, we cut our FY19 estimated CNP by 32 per cent as we incorporate a higher operating cost, which is in-line with management’s effort to enhance and maintain KLIA and KLIA2 in order to meet the QoS set by MAVCOM, and we also introduce our FY20 estimated CNP of RM378.2 million,” Kenanga Research said.
All in, the research team downgraded its call on the stock to ‘market perform’.