Malaysia Airports Holdings Berhad reported a core loss after tax of RM184.9m in 9MFY22 which research house MIDF deems to be within expectation. It made up 93% and 98% of consensus loss estimates it added.
On a quarterly year-on-year basis, MAHB posted a significantly narrower loss, mainly supported by the rebound in pax volumes within the international segment. Pax movements of 24.0m were about 2.4x higher in 3QFY22 (3QFY21: 9.9m). The loss was also partly pared down by the recognition of deferred tax assets. Meanwhile, the core loss was about 4.4x narrower (or +77.0%qoq) on a quarter-on-quarter basis. The non-aeronautical segment saw its revenue surging to RM349.5m (+35.3%qoq or +101.6%yoy) as retailers benefitted from improved footfall in both Malaysia and Turkiye airports.
Cumulatively in the 9-month period, the core loss was about 3.6x narrower in tandem with the recovery of pax movements in both the domestic and international segments. Pax movements in 9MFY22 stood at 58.0m, which was 2.5x higher than in 9MFY21. Relative to pre-pandemic levels, Turkiye’s operations have shown a faster recovery of 22.9m pax (domestic recovery at 70%, international recovery at 107%) against Malaysia’s passenger pax of 35.2m (domestic recovery at 67%, international recovery at 24%).
Turkiye’s international pax has surpassed its 2019 level by 7%, which benefitted the Group given that they are high-yield passengers.
MIDF has placed a buy call on the stock, with full year loss estimate left unchanged, but revised the FY23F/FY24F earnings estimates slightly downwards by – 5.5%/-1.3% after adjusting for higher depreciation expense which would be partially offset by interest savings arising from the retirement of an RM1.5b maturing Sukuk in Dec-22. Malaysia’s domestic segment in 4QFY22 is expected to be uplifted by homebound travels following the 15th General Election (GE15), while international seat capacity is expected to surpass 60% of 2019 level by end-FY22. Elsewhere, the reopening of Taiwan, Japan, and Hong Kong are just in time for the year-end holidays as we await China to fully open its border.
