Journey to Wealth
Malaysia Airports - 3Q12 above expectations
Period 3Q12
Actual vs. Expectations The 9M12 core net profit of RM352m came in above expectations and accounted for 83% and 79% of ours and the consensus' full year FY12 forecasts respectively.
Dividends A single tier interim dividend of 6 sen was declared. At the same time, MAHB has proposed a Dividend Reinvestment Plan (DRP) to shareholders via the issuance of new shares in MAHB. The shareholders have to write in to express their interests in the scheme.
Key Results Highlights For 9M12, MAHB's revenue increased by 14% due to higher tariff on PSC, landing and parking charges during the period. To recap, the new PSC charges took effect in Sept 2011 with staggered increases in the landing and parking charges from 2012 to 2014. However, the core net profit only increase by 6% to RM352m due to the increase in the operating cost (+16%). Its associate, MALE contributed c. RM20m to the pre-tax profit.
YoY, the 3Q12 core net profit increased marginally by 2% despite the 11% rise in the revenue (excludes construction revenue). This was mainly due to a higher staff cost which increased by 9% on the back of additional recruitments, annual increments and salary adjustments.
QoQ, the core net profit and revenue dropped by 4% and 7% respectively. This was due to a lower construction revenue recognised during the period. However, after stripping out the construction revenue recognition, the revenue actually grew by 11% and the core net profit dropped by 5%. The drop in the core net profit was primary due to the rise in airline incentives by 27%.
Outlook The company should see less volatile earnings going forward as it will not have to account further for SGIA losses, which has exceeded the initial investment cost.
As for the DRP plan, we expect the maximum dilution at 3% based on a 16.1 sen dividend for FY12 and share price of RM5.87.
Change to Forecasts
We have tweaked our FY12-13E higher by 4% and 3% respectively as we imputed in the contribution from its associate, MALE.
Rating MAINTAIN OUTPERFORM
Valuation We have revised our TP higher to RM6.66 from RM6.45 based on SoP valuation.
Risks (1) Longer recovery for MAS' business turnaround (2) A significant drop in AirAsia's passenger numbers.
Source: Kenanga
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