Resources

Malaysia Airports Holding Berhad (MAHB)

It was reported that MAHB may achieve its earnings before interest, tax, depreciation and amortisation (EBITDA) target of RM1 billion earlier than 2014. Its Managing Director Tan Sri Bashir Ahmad Abdul Majid commented during the company's 12th Annual General Meeting that this will depend on the performance in 2011 and 2012 respectively. He said that commercial development would be the main driver for the group to achieve its EBITDA target where at least 60% of its revenue would be from commercial business through optimising current retail space and creating new commercial space to attract customers and drive sales. MAHB would also provide incentives to attract new airlines to increase both aircraft and passenger related revenue to achieve the RM3.2 billion in revenue in 2014. MAHB also anticipates further changes in the industry landscape following the liberalisation of intra-Asean air service agreements and arilines' route expansion. The growth of low-costs airlines also resulted in the increased of flights from its airports to regional destinations. He noted that one of their key challenges would be to ensure they continue to provide adequate capacity.

Haulage rates to go up 20%

The Association of Malaysian Hauliers (AMH) whose 66 members control 70% of the local container haulage market, will raise haulage rates by 20% from 1 June 2011 as a result of continued escalation of operating costs. The President of AMH Datuk Ahmad Shalimin Ahamd Shaffie commented that the liberalisation of the haulage industry in 2000 resulted in an increase in container haulage operators to more than 200 now. However, their productivity and efficiency has suffered due to long delays at container depots and other bottlenecks causing their operating costs to escalate. Recent statistics depicted that current productivity is estimated to average 2 to 2.5 trips  per day compared to the previous 3 to 5 trips per day for each truck. It has been estimated that each truck wastes up to RM20 per trip due to delays. AMH believes the raise in rates are reasonable although they will be above the existing Tariff Guidelines which is currently RM444 for both 40-footer and 20-footer container deliveries in the central region.

Moody's Investors Service has assigned an A3 issuer rating to MAHB

This is the first time that Moody's has assigned a rating to MAHB. MAHB's A3 rating combines (1) its standalone Baseline Credit Assessment of 8, which is equivalent to the Baa1 level under Moody's Global Rating Scale; (2) high support that Moody's believes the government would provide in the event that extraordinary financial support is required. This is a one-notch uplift to the fundamental rating. Elizabeth Allen, a Moody's Vice President and Senior Credit Officer commented that MAHB's fundamental credit strengths are mainly underpinned by its position as a close-to-monopoly airport operator in Malaysia where there is a track record of strong passenger traffic growth. The cumulative average passenger growth rate of the last 10 years was 5.8% and in 2010 it was 12.7%. This is driven by a strong domestic economy, an attractive tourism sector and the expansion of the low-cost carriers, whose presence in Kuala Lumpur in particular has stimulated demand. MAHB is said to operate under a favourable regulatory framework which aims to protect the commercial viability of the country's airports, while allowing the government to pursue the goals of its social policies.

Please contact our This e-mail address is being protected from spambots. You need JavaScript enabled to view it for more information on a specific issue or statement.