KUALA LUMPUR (Jan 27): Given the more cautious economic outlook, Malaysia Airports Holdings Bhd (MAHB) (fundamental score: 0.50; valuation score: 0.60) anticipates its EBITDA for FY2015 to be at RM1.52 billion with passenger traffic growing 3% to 85.8 million movements.

For comparison, MAHB had registered annual EBITDA of RM899.66 million for FY2013, a drop of 3.24% from RM929.74 million in FY2012, according to announcements with Bursa Malaysia.

The airport operator will release its financial result for 4QFY2014 ended by end-February.

As for its nine months ended Sept 30, 2014, MAHB registered an EBITDA of RM648.4 million including construction profit.

It achieved net profit of RM85.64 million, a decrease of nearly 75% from RM340.58 million a year earlier. Revenue came in 11.6% lower at RM2.63 billion as compared with RM2.97 billion in 2013.

The group has revealed in its headline key performance indicators (KPIs) statement with Bursa Malaysia today that its EBITDA KPI of RM1.52 billion was upon the consolidation of Istanbul Sabiha Gokcen Ulus (ISG) and LGM Havalimani Isletmeleri Ticaret ve Turizm A.S.lararasi Havalimani Yatirim, Yapim ve Isletme A.S (LGM).

The increase in EBITDA will also be complemented by the impact of full year retail and commercial operations at klia2 along with higher passenger movements, said MAHB.

The airport operator noted that there is room for further optimism for 2015, being the Malaysia Year of Festivals as well as the return of British Airways to Malaysia.

It reasoned that the recent drop in fuel price might help stimulate air travel demand in 2015 as profitability for airlines would increase and in turn, encourage increased seat offerings and lower fares.

Preliminary traffic results indicate airports operated by MAHB locally handled 83.3million passengers in 2014, a 4.7% increase on the back of the 18.4% growth achieved in 2013, it said.

International passenger movements achieved a growth of 4.9% while domestic passengers recorded 4.5% growth over 2013.

Aircraft movements registered a 7.3% increase whereas cargo movements recorded 8.0% growth over 2013.

Globally, MAHB said that airports council international (ACI), International Civil Aviation Organisation (ICAO) and International Air Transport Association IATA have projected global passenger traffic growth of 4.7%, 6.3% and 7.0% respectively for 2015.

Meanwhile, MAHB said ISG’s passenger movement is expected to grow by 15% in 2015, of which 19% growth is expected from the international sector and 12% from domestic sector.

Aircraft movements are expected to register a 13% growth while cargo movements would likely experience a 5% growth over 2014. It had completed the acquisition of the remaining 40% equity stake in ISG and LGM on Jan 2, for 279.23 million euros (RM1.176 billion).

MAHB share price dropped 1.64% to RM7.18 today, translating to a market capitalisation of RM9.89 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)