Malaysia Airports plans to grow revenue from commercial or non-aeronautical activities

Malaysia Airports targets RM1b profit

By Presenna Nambiar

Published: 2010/04/02

The airport operator plans to grow revenue from commercial or non-aeronautical activities to RM2.14 billion in 2014


Commercial development, including growing its retail sales and developing part of its landbank around KL International Airport (KLIA) in Sepang, will be the key driver of Malaysia Airports Holdings Bhd's (MAHB) (5014) goal of achieving RM1.1 billion in net profit by 2014.

This is set against a revenue target of RM3.2 billion.

The airport operator plans to grow revenue from commercial or non-aeronautical activities to RM2.14 billion in 2014, from RM861 million in 2008.

Development of its landbank includes the Malaysia International Aerospace Centre (MIAC) at Sultan Abdul Aziz Shah Airport in Subang, Selangor, and the proposed KLIA Aeropolis in Sepang.
"We have an extensive landbank (at KLIA) that is available for commercial development where we will establish strategic alliances with major commercial property developers before the end of the year," MAHB managing director Tan Sri Bashir Ahmad said.

"In the meantime, the major contributor (to group earnings) will be the new (low-cost carrier) terminal at KLIA, which is designed to provide the most exciting shopping and dining experience in Asia," he told reporters at the launch of MAHB's five-year business direction, called "Runway to Success", in Kuala Lumpur yesterday.

Over 480ha at the MIAC has been allocated under the National Airport Master Plan, with a 60-year tenure.

Revenue from the MIAC will come from land lease, joint-venture arrangements, equity-sharing and royalty from sales.

Meanwhile, under its KLIA Aeropolis development, MAHB plans to use 1,092ha, from the 8,862.4ha at its disposal, for commercial development.

The development includes a commercial business district, KLIA MSC Free Zone as well as leisure, recreational and agro-tourism components.

In the 71-page report revealed earlier, MAHB outlined three core areas in its business direction objectives to drive growth.

One is traffic growth. It wants to increase annual passenger numbers to more than 60 million by 2014, with a focus on strengthening KLIA as a next-generation hub.

The second involves enhancing its commercial revenue as the main driver to achieve group earnings before interest, tax, depreciation and amortisation, and return on equity in excess of RM1 billion and 10 per cent respectively.

MAHB also wants to maintain top-quality service levels, benchmarked against the best airports worldwide.

Bashir also confirmed a Business Times report yesterday that the company would be setting up either a separate subsidiary or special purpose vehicle to raise funds for overseas airport management projects. This falls within its five-year business plans.

"We are exploring the idea now. What we want to do is to keep such investments separate so that they do not impact our balance sheet. The idea is to provide funding for such projects through investments by partners," Bashir said, without elaborating.

http://www.btimes.com.my/Current_News/BTIMES/articles/pmahb4-2/Article/index_html