Malaysia Airport Holdings narrows losses in Q1 as tourism picks up

AS international travel continues to pick up, Malaysia’s airport operator group is seeing light at the end of the tunnel with several analysts positive on the company’s future growth prospects.

Malaysia Airport Holdings Berhad (MAHB) narrowed its losses in the first 3 months of 2022 to RM104.76 million (S$32.8 million), compared to a RM221.3 million loss in the same quarter a year ago.

On revenue, the company saw turnover of RM570.85 million, an increase of 69.4 per cent compared to the same period last year, MAHB said in a filing to Bursa Malaysia on Monday evening (May 30).

Malaysia’s passenger traffic movements rose to 8.3 million for the first quarter of 2022, a nearly 5-fold increase from the 1.7 million travellers in the same quarter last year.

“Malaysia operations passenger traffic improved significantly to 8.3 million as compared to 1.7 million passengers in the corresponding quarter in the prior year.

With the country’s full relaxation of travel and border restrictions for vaccinated travellers from April 1, the daily average of international passengers in May this year reached 33,407 - or about 20 per cent of the numbers in May 2019.

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“The surge in passenger movements across our network of airports signals a clear trajectory towards a recovery. As borders continue to reopen, we are pivoting towards opening up our vast revenue-generating propensity and further growth opportunities, thereby accelerating a return to profitability,” the company said.

Malaysia Airports Holdings is one of the world’s largest airport operator groups in terms of passengers handled. It manages and operates 39 airports in Malaysia and the Sabiha Gokcen International Airport in Istanbul, Turkey.

Khoo Zing Sheng, an analyst from AmInvestment Bank, said MAHB’s fundamentals are improving, premised on the recovery in the air travel and tourism sectors as the pandemic continues to come under control and vaccination rates increase around the world.

He expects Malaysia’s passenger traffic to spike by 5 times year-on-year in 2022 from a low base, with the numbers reaching 60 per cent of pre-pandemic levels.

RHB Investment’s analyst Raja Nur Aqilah Raja Ali said it will take time for MAHB to return to profitability, given that key markets such as China remain closed to most travellers. China was the second-highest contributor of foreign tourists into Malaysia in 2019.

Commenting on MAHB’s share price, she noted that it has rallied 60 per cent from its 2-year low in Oct 2020 and the prospects of recovery for the company have largely been priced in. The counter closed at RM6.57 on Tuesday, up slightly from Monday’s close of RM6.52.