Research firms lift MAHB earnings forecast

by **hlk** Wed 17 Aug 2011, 18:18

Research firms have raised Malaysia Airports Holdings Bhd's (MAHB) earnings forecasts for the next few years following the latter's announcement of implementing new international passenger service charge (PSC) and aircraft landing and parking charges at airports operated by the group effective Sept 15.

Kenanga Research said the decision was positive for MAHB as it would mitigate earnings distress once the KLIA 2 starts operations by end financial year 2012.

"Based on our analysis, our earnings forecast for financial year 2011 and 2012 inched up by five per cent and eight per cent. "This is after we imputed in the RM7 increase per pax for LCCT international passengers, nine per cent per annum for aircraft landing charges and 18 per cent per annum for packing charges for the period from 2012 and 2014," it said.

On Tuesday, MAHB announced that the raise has obtained the government's approval and that it was in line with the Operating Agreement signed between the government and MAHB in February 2009.

MAHB said the international PSC would be increased from RM51 to RM65 at the KLIA Main Terminal Building, Sultan Abdul Aziz Shah Airport in Subang, Langkawi International Airport, Penang International Airport, Kota Kinabalu International Airport Terminal 1 and Kuching International Airport.

It said charges will be raised from RM25 to RM32 at LCCT and Terminal 2 Kota Kinabalu International Airport. The new rates are to be applicable from Sept 15.

In a related development, Hong Leong Investment Bank, in a research note, said the higher charges would raise MAHB's overall revenue as it did not incur extra cost.

The research firm also raised the group's financial year 2011 earnings forecast by 1.4 per cent and the following year 2012 and 2013 earnings by 9.3 per cent and 15.3 per cent, respectively.

Meanwhile, Kenanga Research maintained its "market perform" call on MAHB with an unchanged target price of RM6.83. Hong Leong Investment also maintained its "hold" call on MAHB, however with
a higher target price of RM6.70. -- Bernama