Malaysia Airports Holdings Berhad reported a core PAT of RM163.6m in 4QFY23, totalling RM470.2m for FY23. MIDF said the earnings met its expectation but exceeds consensus, accounting for 105%/122% of its/consensus full-year estimates. The group had also declared a final dividend of 10.8 sen per share, constituting a payout ratio of 37%.
In 4QFY23, MAHB posted a fourth consecutive core PAT of RM163.6m, a turnaround from the loss in 4QFY22. Against 2019 levels, Malaysia’s passenger numbers recovered to 78%, while Istanbul SGIA witnessed a notable +12.0% growth, fueled by its robust international traffic. MAHB’s commercial and retail initiatives have led to an operational occupancy rate of 81% in FY23, with plans to surpass 85% by Jun-24. An increase in spending per ticket to RM312 from RM233 in FY19 reflects the impact of enhanced product offerings. Sequentially, earnings rose by +21.8%qoq, partly driven by improved contributions from its JVs and associates, along with a higher tax credit.
The group remains optimistic about achieving full passenger traffic recovery this year, which the house anticipates will likely materialise in 2HCY24. Daily international passenger volumes in Feb-24 have reportedly surpassed those in Dec-23, marking an encouraging trend. There is ample opportunity for expansion, particularly in the non-ASEAN sector, thanks to the reciprocal visa-free entry agreement. MAHB has set a target of welcoming 17 new carriers this year to operate from local airports, with 5 already secured. As of Feb-24, the number of airlines operating in Malaysia stands at 68, nearly reaching the pre-pandemic level of 69 airlines.
MIDF maintains a NEUTRAL call on the stock with earnings estimates remaining largely unchanged after updating the full-year figures. The house noted that the stock is trading close to its pre-pandemic mean. Key catalysts include faster-than-expected recovery of the non-ASEAN sector, and local airlines rebuilding their fleet.
