MAHB’s 4Q23 results may beat historical trend

These are important as the passenger service charge (PSC) charged on foreign pax traffic in Malaysia is 5 to 7 times higher than that of the domestic one.

Maybank Research

Analysts at Maybank investment Bank Bhd (Maybank Research) believe that it is likely that Malaysia Airport Holding Bhd’s (MAHB) fourth quarter of 2023 (4Q23) will beat historical trends with a quarter over quarter (q-o-q) higher performance.

To recap, MAHB’s 4Q has historically always been seasonally weaker q-o-q due to back loading of expenses like staff costs and maintenance towards the year-end.

However, this may longer be the case anymore as MAHB has provisioned for staff bonuses through the year and offset its Istanbul Sabiha Gokcen’s potentially higher expenses q-o-q on higher maintenance and security costs in tandem with higher pax traffic.

As a result, Maybank research is now forecasting MAHB’s 4Q23 core net profit (CNP) to come in at around RM95 million to RM100 million, higher than the RM80.3 million it had recorded in 3Q23.

They added that their optimistic predictions for MAHB’s 4Q23 results are also supported by increased interest in foreign airlines in flying to Malaysia, even more than the pre-pandemic era.

The research arm pointed out that while pax carried by foreign airlines into Malaysia has already recovered to pre-pandemic levels in 3Q23, MAHB has guided that they have received inquiries for more airport slots from Chinese airlines since Malaysia waived visa requirements for Chinese visitors effective Dec 1.

Furthermore, major foreign airlines like Lufthansa, British Airway and Qantas, are also due to return flying to Kuala Lumpur in the second half of 2024 (2H24).

“These are important as the passenger service charge (PSC) charged on foreign pax traffic in Malaysia is 5 to 7 times higher than that of the domestic one,” Maybank research highlighted.

“Moreover, PSCs in Malaysia will still be hiked by the historical 5-year cumulative consumer price index minus 0.1 per cent on Feb 11 as stipulated under its current Operating Agreement (OA) with or without the new OA,” they added.

Currently, the Malaysian Aviation Commission has yet to release its third consultation paper that is expected to guide MAHB’s new OA with the Malaysian Government.