New OA arrangement provides flexibility for MAHB
KUCHING: MIDF Amanah Invesment Bank Bhd ( MIDF Research) is positive on Malaysia Airport Holdings Bhd (MAHB) obtaining approval for the extension to its operating agreement (OA) for 39 airports in Malaysia by the federal government.
The extension entails an additional 35 year period until February 2069 on top of its current 25 year concession which ends in 2034.
MIDF Research saaw that the latest announcement on the OA laid out the terms for the extension which includes the introduction of four new OAs for KLIA, designated airports in Peninsular Malaysia, Sabah airports and Sarawak airports.
In comparison previously, there were only two OAs; one for KLIA and another for the non-KLIA airports.
“With more OAs based on regional groupings, MAHB would be able to source for suitable partners according to the requirements of a particular region,” MIDF Research opined. “Moreover, adjustments can be made for price cap values, associated tariffs and charging levels according to each regional grouping.
“This would be based on the capital expenditure which will be provided by MAHB, aligned with the spirit of the upcoming Regulatory Asset Base (RAB) framework.
“As such, we believe such arrangements would promote further sustainability and flexibility for MAHB’s development plans to improve airport and infrastructure.”
MIDF Research believes the new terms does not significantly change its cash flow estimates for the airport operator.
“Therefore, we believe that MAHB will be able to maintain its upward trajectory especially in terms of passenger growth. This is amidst the relaxation of visa policies for Chinese and Indian nationals visiting Malaysia.
“Hence, we reiterate our optimism that MAHB passenger numbers will surpass the 100m mark in 2019, while maintaining a relatively conservative growth rate of 3.5 per cent at 103 million.”