Period    4Q12/12M12

Actual vs. Expectations  The FY12 core net profit of RM452m came in within our full-year expectation and that of the consensus as well. As expected, MAHB had provided RM69m for the profit reversal (RM47m) and provision for its 23% equity investment (RM22m) in MALE airport. 

Dividends   No dividend was announced in the quarter. To date, MAHB has announced single tier dividends totalling 13.6 sen per share. About RM72.6m of its interim dividend payment (at 6 sen DPS) has been converted into 7m shares as per its Dividend Reinvestment Plan (DRP). 

Key Results Highlights  The FY12 core net profit of RM453m increased marginally by 3% on the back of a 29% jump in the revenue. This was mainly due to the increase in the operating cost and a lower contribution from MARCS. This resulted in a lower net margin recorded from 14% to 11% YoY. The passenger movements increased by 5% YoY supported with strong domestic segment traffic. MAHB recorded a RM1.4b construction revenue in FY12 (vs. RM820m in FY11) with the construction of KLIA2 progressing to a 79% completion. This is slightly behind the schedule as the completion now is at 79% as compared to the scheduled completion of 83%.

 YoY, the core net profit was down by 4% to RM99m despite the 63% jump in the revenue. This was again due to the increase in operating cost and the additional impairment made for its associate, i.e. SGIA of RM23m. MAHB has also made a RM21m provision for its investment cost in MALE airport. Based on management guidance, it is likely that the JV will recover its cost of investment in the airport.      

 QoQ, the revenue increased by 76% while the core net profit dropped by 12%. The drop was mainly due to the additional maintenance cost and impairment made for SGIA airport.   

Outlook   The long-term positive outlook remains intact. MAHB has guided for a lower EBITDA (-13%) in FY13 due to higher operating cost assumption and depreciation charge for the upcoming new KLIA2 operation. We, however, expect a stronger rebound in earnings from FY14 onwards.

Change to Forecasts   We have revised down our FY13E earnings forecast by 10% as we factored in a higher depreciation and operating cost from the planned new KLIA2 operation in June 2013.

Rating    MAINTAIN OUTPERFORM

Valuation    Inline with the earnings revision, we have revised down our SOP valuation by 5% to RM6.12 (vs. RM6.42 previously).   

Risks   A significant drop in the passenger numbers due to catastrophic events.   

Source: Kenanga