Malaysia Airports upbeat despite 25% drop in Q1 revenue due to Covid-19

Malaysia Airports Holdings Berhad says travel restrictions following the Covid-19 pandemic have severely affected the global aviation industry.

PETALING JAYA: Malaysia Airports Holdings Berhad (MAHB) has voiced confidence it will be able to sustain the pressure caused by Covid-19 which saw its first quarter revenue drop by 25.4% compared to the corresponding period of 2019.

In a statement, Malaysia Airports reported revenue of RM933.8 million and core earnings before interest, tax, depreciation and amortisation (Ebitda) of RM304.2 million for the first quarter of 2020, a 46.2% reduction from Q1 2019.

It said the Covid-19 outbreak led to large capacity cuts, travelling bans and closed borders around the world, severely affecting the global aviation industry and traffic in most airports.

“With the combined operating performance of Istanbul Sabiha Gokcen International Airport (ISG), the group’s network of airports handled 25.5 million passengers in Q1 2020, representing a decline of 23.9% over Q1 2019,” it said.

Passenger traffic in airports in Malaysia declined by 27.5% to 18.4 million passengers in the quarter under review, with KLIA recording a 29.3% reduction to 10.7 million passengers.

Traffic at other airports, on average, declined by 25%.

“Malaysia Airports remains prudent with a healthy financial position and strict governance in place that it will be able to sustain the pressure from the pandemic outbreak.

“Moving forward, Malaysia Airports is confident of its capabilities to fund operations and address any potential liquidity risks over the coming year,” it said.

It said several strategies, including an 18-month optimisation plan, have been implemented. This plan will prioritise critical maintenance capital expenditures and see non-critical development being deferred.

This is expected to reduce costs by 20%, though critical asset replacements, including the baggage handling system and aged aerotrain track transit system, will continue as planned.

“The management has also identified key areas of optimisation including reorganisation of the workforce, zerorising overtime requirements and implementing effective work schedule to contain staff costs without furloughing its employees, to ensure the continuous operations of all airports without any disruptions.

“Other means of conserving cash include credit management via deferment of payments and rebalancing some financial costs to ensure a healthy cash position sufficient for the group’s working capital.”

It said it expects domestic travel to slowly pick up with the easing of travel restrictions though the international travel trend remains uncertain due to restrictions in other countries.

“Malaysia Airports will continue to work and support all its partners to ensure a smooth recovery of the aviation industry,” it said, adding that the safety of passengers and those working at the airport remain its top priority.

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