KUCHING: Malaysia Airports Holdings Bhd (MAHB) is poised to be the
biggest beneficiary to the RM1 billion budget allocated for the
upgrading of infrastructure and facilities at some airports the aviation
industry, announced during Budget 2014.
To recap, in Budget 2014
tabled last Friday, the government announced that it will allocate a
total of RM1 billion for the upgrading of infrastructure and facilities
at some airports in the country. These include the allocation of RM700
million for the replacement of existing air traffic control and
management system in Subang, a new air traffic management centre which
will be built at Kuala Lumpur International Airport (KLIA).
In
addition, RM312 million has also been allocated for the upgrading of
Kota Kinabalu, Sandakan, Miri, Sibu, and Mukah airports in Sabah and
Sarawak.
The Budget 2014 also outlined the set-up of a National
Aviation Policy to strengthen the ecosystem and services network in the
Malaysian aviation industry to make Malaysia a leading aviation hub.
According
to RHB Research Institute Sdn Bhd (RHB Research), MAHB, which manages
all airports across the country except for one in Johor, is likely to be
a major beneficiary of this government’s initiative in the long run.
“Our
checks with management indicates that the Budget 2014 allocation for
infrastructure upgrades will unlikely translate into a higher proportion
of user fees, noting that these assets that the government is spending
on will not be revenue-generating.
“For the past airport upgrades
in Ipoh, Kota Bharu, Kuala Terengganu and Malacca, as well as the
ongoing Kota Kinabalu Airport upgrade, the government’s higher capital
expenditure allocation did not translate into a higher revenue share for
MAHB,” the research firm explained.
As such, it upgraded its
earnings forecast for on MAHB financial year 2014 (FY14) and FY15 by six
and 10 per cent respectively, attributed to higher passenger
assumptions, with its FY13 and FY14 growth assumptions raised to 14 and
12 per cent, a lower corporate tax rate, which the research firm have
reduced to one per cent, and higher interest income on a higher cash
pile as it trimmed its costs overruns assumptions for the KLIA2 from
RM0.5 billion to RM0.2 billion.
Source: Borneo Post Online | 29 Oct. 2013
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