Moody's affirms MAHB A3 rating
Published on: Saturday, January 31, 2015
Kuala Lumpur: International rating agency Moody's Investors Service has affirmed A3 issuer rating to Malaysia Airport Holdings Bhd (MAHB) with a positive rating outlook. Moody's, in a statement today, said the rating and outlook are in line with the government's A3 sovereign rating and positive rating outlook. "MAHB's positive rating outlook reflects Moody's positive rating outlook for the Malaysian sovereign as well as MAHB's important policy role and contributions to Malaysia's tourism, export and aviation industries," it said.
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However, the rating agency has lowered the airport operator's baseline credit assessment to baa2 from baa1, reflecting the company's weaker standalone credit quality. This is following the completion of a 40 per cent stake acquisition in Istanbul's second-largest airport by passenger traffic, Sabiha Gokcen International Airport (SGIA), in December last year, bringing MAHB's total stake in SGIA to 100 per cent. "Moody's expects that the full consolidation of SGIA into MAHB will result in a 30 per cent increase in adjusted debt," it said. It said while SGIA's debt burden is high, the airport — with the help of a 500 million euro corporate guarantee from MAHB — has refinanced the debt it raised during the global financial crisis at lower interest rates, resulting in between 20 million and 25 million euro interest savings every year.
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Moody's said the airport has also achieved higher passenger volumes, a situation which reduces its loss position. It said SGIA achieved a significant 34 per cent compound annual growth in passenger volumes during 2008-2013 and as a result, the airport is expected to almost breakeven in the financial year ending Dec 31, 2015.
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As for MAHB, it said the company's operational performance at its Malaysian airports will support its revenue growth and financial profile. It said MAHB still managed to record a passenger traffic growth of five per cent for the financial year ended Dec 31, 2014 despite a series of airline disasters last year involving its key airline operators. However, it said passenger traffic growth is expected to fall between 1.5 per cent and three per cent this year. Moody's said downgrade pressure on MAHB's rating is unlikely, given the positive outlook, but the company's rating could be downgraded if the government's rating is downgraded, which is unlikely for at least over the next 12 months. Stay up-to-date by following Daily Express’s Telegram channel.
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