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Muhibbah wins two airport jobs

PETALING JAYA: Muhibbah Engineering Bhd and its Cambodian airport concession partner have been awarded two contracts worth US$87mil (RM276mil) to construct and expand the terminal building and the refurbishment of the airports in Phnom Penh and Siem Reap.

In a filing with Bursa Malaysia, it said the contracts were awarded by Societe Concessionaire de L’Aeroport (SCA) to a joint venture formed by French partner Vinci Group and Muhibbah, with Muhibbah holding a 30% stake. “In view of the rapid growth of airports’ passengers arrivals over the years and expected increasing trend of airports business, SCA has embarked on this capital expansion programme to further extend and upgrade the international airports of Cambodia,” it said.

It said the works on both airports were expected to be completed by end-2015. SCA is the concessionaire that manages the airports in Phnom Penh and Siem Reap, of which Muhibbah also has a 30% stake. The remaining 70% is held by French Group Vinci. It holds exclusive rights for the privatisation of all international airports in Cambodia.
07 Nov 2013, 08:55 AM

31 May 2017, 11:18 PM

Muhibbah Engineering: Fast-growing Cambodian airports provide solid recurring income

With a fast-growing airport concession business contributing more than half of its bottom line and 80% of its crane business still coming from overseas markets, Muhibbah is becoming less of a domestic infrastructure company.

9M18 results were in line with expectations. As at 28 November 2018, the total outstanding secured order book for construction and cranes division is RM1.8 billion.

Revenue grew 3.4% yoy, driven by all divisions. 9M18 EBITDA margin stood at 11.7% vs 9M17: 11.5. Overall 9M18 core net profit grew by 12.4%, boosted by the 67% yoy growth mainly from its Cambodian airport concessions.

The concession business continues to anchor Muhibbah’s profits and provide solid recurring income. Its pretax profits contributions rose to 61% from 9M17: 58% as traffic growth remains strong at Phnom Penh (+21.6%) and Sihanoukville (+73%) respectively.

In 3Q18, they handled 2.4 million passengers, +16.4% increase compared with the same period in 2017. The 4Q of the calendar year is typically a strong quarter due to the year-end festivities.

The division also benefitted from the stronger US$ vs. RM in 3Q18, which earns profits in US$. Cambodia Airport, the dedicated airport manager for Phnom Penh, Siem Reap and Sihanoukville airports, has allocated $2 billion to develop the airport network by the end of its concession period in 2040. Part of this investment has been planned to renovate the airport runway to handle more traffic in future.

Thus far, the market has yet to fully appreciate its unique business model with varied construction expertise and strong recurring income. DBS research estimates its 21% stake in the Cambodia airport concession to be worth conservatively RM734m (DCF, WACC 10% and average passenger traffic growth of 5.9% p.a. until 2040), which is already about half of the stock’s market capitalisation.



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20 Feb 2019, 02:03 PM