Malaysia Airports tempers 2013 earnings target on cost worries

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Malaysia Airports Holdings Berhad (MAHB) has lowered its earnings target for 2013 as a result of worries about the higher operating costs associated with a new budget terminal at Kuala Lumpur International Airport (KLIA).

The company has set an earnings before interest, taxes, depreciation and amortisation (EBITDA) target of ringgit (M$) 751 million ($247 million) for 2013, lower than the target of M$822 million for the fiscal year 2012 set in December 2011.

In a filing with Bursa Malaysia, MAHB, which operates a number of airports in Malaysia including Kuala Lumpur International Airport, says that EBITDA will be affected by higher operating costs as it opens the KLIA 2 terminal in May 2013. Higher revenue share payments to the Malaysian government will also have an impact on costs, adds MAHB.

It is, however, expecting to have a strong boost in revenue with passenger numbers through its airports to grow by 7.1%, as local and foreign carriers continue to grow over the next year.

"Many of the airlines' routes and capacity cuts that were affected over the last year have been reinstated or are in the process of being reinstated, as evidenced by the stronger traffic growth registered in Q4 2012," says MAHB.

While it has not yet released its passenger figures for 2012, it is expecting a 4.6% increase in passenger numbers compared with 2011, with aircraft movements to increase by 2% and cargo movements to decline by 0.6%.