Malaysia Airports Holdings Berhad (MAHB) reported a core profit after tax (PAT) of RM195.6 million for the second quarter of FY24, in line with expectations and accounting for 49% of the annual forecast. The company achieved a total core PAT of RM368.7 million for the first half of FY24, reflecting a substantial year-on-year increase of 78.2%. Revenue rose by 11.9% compared to the previous year, primarily driven by a notable recovery in passenger traffic, which reached 97% of pre-pandemic levels during the quarter.

In the second quarter of FY24, Malaysia's passenger traffic was at 90% of pre-pandemic figures, while Istanbul Airport (ISG) experienced a full recovery with 119%. MAHB's operational occupancy rate improved to 83% in the first half of FY24, up from 63% in the previous year. The company's commercial and retail strategies, including enhancements to Eraman's duty-free offerings, have contributed to higher average spending per ticket, which increased to RM338 from RM233 in FY19.

Despite these positive developments, the outlook for Malaysia's passenger traffic recovery has been extended to FY25. The adjustment in recovery projections for FY24F and FY25F reflects a revised growth expectation of 94% recovery and 4% growth, respectively, due to ongoing challenges in the local airline industry. The Turkish operations, however, have shown strong performance, leading to an upgraded FY24F growth forecast of 26% compared to 2019 levels.

Analysts at MIDF are currently recommending investors to accept the buyout offer of RM11.00 per share. This offer represents an 18% premium over the revised fair value of RM9.32, which reflects a downward revision in earnings estimates by -5.3% for FY24F, -2.2% for FY25F, and -2.2% for FY26F. With MAHB's performance meeting expectations and the substantial premium offered, the recommendation is to accept the buyout offer.