18 th Annual General Meeting 25 May 2017

Transcription

1 18 th Annual General Meeting 25 May 2017

2 Disclaimer This presentation may contain forward-looking statements by Malaysia Airports Holdings Berhad (MAHB) that reflect management s current expectations, beliefs, intentions or strategies regarding the future and assumptions in light of currently available information. These statements are based on various assumptions and made subject to a number of risks, uncertainties and contingencies. Actual results, performance or achievements may differ materially and significantly from those discussed in the forward-looking statements. Such statements are not and should not be construed as a representation, warranty or undertaking as to the future performance or achievements of MAHB and MAHB assumes no obligation or responsibility to update any such statements. No representation or warranty (either express or implied) is given by or on behalf of MAHB or its related corporations (including without limitation, their respective shareholders, directors, officers, employees, agents, partners, associates and advisers), as to the quality, accuracy, reliability or completeness of the information contained in this presentation, or that reasonable care has been taken in compiling or preparing the Information. No part of this presentation is intended to or construed as an offer, recommendation or invitation to subscribe for or purchase any securities in MAHB. 2

3 Welcome Remarks by the Chairman Tan Sri Dato Sri Dr. Wan Abdul Aziz bin Wan Abdullah 3

4 Voting Procedure The voting at the 18 th AGM will be conducted on a poll in accordance with Paragraph 8.29A of Bursa Malaysia Securities Berhad Main Market Listing Requirements. MAHB has appointed Securities Services (Holdings) Sdn Bhd as Poll Administrator to conduct the poll by way of electronic voting (e-voting) and Commercial Quest Sdn Bhd as scrutineers to verify the poll results. 4

5 18 th Annual General Meeting Presentation to Shareholders Datuk Mohd Badlisham bin Ghazali Managing Director 5

6 25 Years Serving The Nation Malaysia Airports Incorporated Licensed by MOT as Airport Operator Opening of KLIA MAHB is Khazanah s Top 20 GLC Opening of LCCT New Operating Agreement Expansion of LCCT Sama-Sama Hotel Launched Expansion of Penang International Airport Full Acquisition of ISG Opening of Mitsui Outlet Park Launch of RtS2020 Launch of KLIA Aeropolis Extension of Operating Agreement 2017 MoU with Cainiao Network 1 st Airport Operator in Asia Listed in Stock Exchange klia2 Ground Breaking Ceremony Opening of klia2 Graduation from GLC Transformation Programme with a TSR more than 500% MAHB s Celebrates 25 Years Serving the Nation Today MAHB s Transformation from: Airport Operator to Service Leader Infrastructure Manager to Ecosystem Manager Value-added to Value Creating 6

7 MAHB Today 5 MALAYSIAN OPERATIONS 16 VISION A GLOBAL LEADER IN CREATING AIRPORT CITIES 18 SERVING 128 CARRIERS 118 MILLION PASSENGERS* OVERSEAS AIRPORT INVESTMENTS IN INTERNATIONAL AIRPORTS DOMESTIC AIRPORTS STOLPORTS *Passengers = Malaysia + ISG in 2016; Airlines = scheduled flights operating out of KUL + ISG as of December K *FY16: KLIA + ISG TONNES CARGO* ISTANBUL SABIHA GOKCEN INTERNATIONAL AIRPORT (100%) RAJIV GANDHI INTERNATIONAL AIRPORT HYDERABAD (11%) KUALA LUMPUR INTERNATIONAL AIRPORT (KLIA) 1 ST AIRPORT OPERATOR IN ASIA TO BE LISTED RM14.5 billion MARKET CAPITALISATION AS AT 24 May 2017 ONLY ASEAN AIRPORT WITH THREE PARALLEL RUNWAYS WORLD S 13 TH BUSIEST INTERNATIONAL AIRPORT* # TOP 9 AIRPORT SERVICE QUALITY IN THE WORLD (>40MPPA CATEGORY)* *Based on Airports Council International (ACI) as at FY16 7

8 Key Highlights Launch of Runway to Success 2020 Charting the course for the next 5 years with 4 strategic priorities KLIA Seamless Connectivity KLIA exceeded 50 million passengers for the first time, growing faster than peers Launch of KLIA Aeropolis Signed a Memorandum of Understanding (MoU) with Cainiao Network to explore the potential for developing a regional e-commerce & logistic hub Recognised for Operational & Financial Excellence KUL ranked ASQ Top 9 & Best Airport Immigration Service, LGK ranked ASQ Top 3 in its category Extension of Operating Agreement by 35 years to 2069 Negotiating terms for the Group s long term stability 8

9 Runway to Success

10 2020 Key Outcomes RtS2020 sets the direction for MAHB to further drive growth To be the global leader in creating airport cities RtS2020 Traffic 155 mppa MY: Int l: 115 mppa 40 mppa Revenues RM 7.5 bil MY: Int l: RM 5.0 bil RM 2.5 bil EBITDA RM 3.0 bil MY: Int l: RM 1.5 bil RM 1.5 bil Aeropolis 1,000 acres new development Strengthen the core Expand and diversify KUL Hub Total Airport Experience Aeropolis International Expansion Realize KUL s potential with focus on critical markets and connectivity Embed customer-centric culture to improve experience for passengers, airlines and retailers Stimulate economic activity of adjacent landside through logistics, aerospace and MICE / leisure segments Increase international footprint and export core airport capabilities Direct contribution to Malaysian aviation industry 10

11 RtS 2020 Achievements in 2016 : Early efforts already paying off 2016 Outcomes Completed Key Initiatives KUL Hub KUL as the preferred ASEAN hub focusing on critical markets and connectivity Route Development Key market focus (China, India & ASEAN) New airlines at KLIA (VietJet, Shenzen and Shaheen) Higher traffic growth compared to Singapore Changi, Bangkok Suvarnabhumi, Jakarta Soekarno - Hatta and Hong Kong Total Airport Experience Re-imagining the airport experience for passengers, retailers and airlines Passenger Experience Passenger Journey Mapping Premium Passenger Program Premium Wifi Retail Experience Category Meeting Airline Experience KUL Experience Aeropolis Unlocking and extracting maximum value from our land bank KL Air Cargo Terminal AirAsia House Approval of Aeropolis KLIA Masterplan International Expansion Strategically investing, growing and diversifying assets New and extended Facilities Management project in Hamad International Airport, Doha 11

12 KLIA Seamless Connectivity 12

13 KLIA - Seamless connectivity for Full Service Carriers & Low Cost Carriers Decision for 3 rd runway and 45 mppa capacity at klia2 is perfect for unbridled growth. Regional peers only now planning for capacity improvements. ASEAN hub for Oneworld 53 mil Passengers (+7.6% against FY15) 120 International destinations 15 Domestic destinations KLIA Air Cargo Terminal 1 (formerly LCCT) Capacity : 15.0mppa FY13 Utilisation: 21.8mppa Primary Hub Malaysia Airlines Malindo Air Major International Airlines Emirates Cathay Pacific Qatar Airways Etihad Air France-KLM Thai Airways Turkish Airlines Saudia Vietnam Airlines Garuda China Southern Xiamen Airlines Singapore Airlines / Silk Air Returning airlines in 2015 British Airways Air China All Nippon Airways New airlines in 2016 Shenzen Airlines VietJet Note:: Parentheses indicates growth over 2015 Runway 1 KLIA (MTB) Capacity: 30.0 mppa* FY16 Utilisation : 25.5mppa (+12.7%) klia2 Capacity : 45.0 mppa FY16 Utilisation: 27.1 mppa (+3.0%) Runway 3 Primary Hub Runway 2 AirAsia AirAsia X Major International Airlines Jetstar Asia Tiger Airways Cebu Pacific Thai AirAsia Indonesia AirAsia Philippines AirAsia 13

14 KLIA s growth outpacing industry peers Suvarnabhumi Airport (BKK) 2016 : 55.9 mppa (+ 5.8%) 2015 : 52.8 mppa Hong Kong International Airport (HKG) 2016 : 53.2 mppa (+ 4.1%) 2015 : 51.1 mppa Changi International Airport (SIN) 2016 : 58.7 mppa (+ 5.9%) 2015 : 55.4 mppa Kuala Lumpur International Airport (KUL) 2016 : 52.6 mppa (+ 7.6%) 2015 : 48.9 mppa Source : ACI Pax Flash Report Soekarno Hatta International Airport (CGK) 2016 : 55.0 mppa (+ 1.7%) 2015 : 54.1 mppa 14

15 Providing greater connectivity for Malaysia Total Passengers (Malaysia) (mil) FREQUENCY : +364 Additional Frequencies International 84 Domestic 496 Northeast Asia 29 Southeast Asia 29 South Asia 9 Australasia 5 Middle East 6 Europe AIRLINES KLIA Other Airports * 2015: ROUTES : +29 Additional Destinations International 35 Domestic 6 Northeast Asia 12 Southeast Asia 12 South Asia 5 Australasia 3 Middle East 2 Africa 1 * Lucky Air began services to Kota Kinabalu and Penang International Airport in

16 37.2 Million International Passenger Movements at KLIA in 2016 Passenger Movement by Sector Top 10 Country Movements Region Composition Top 3 Countries Growth Growth South East Asia 46.8% Indonesia (16.6%), Singapore (10.4%), Thailand (10.2%) 1 Indonesia 8.7% 6 Australia 0.9% North East Asia 22.3% China (9.1%), Hong Kong (4.2%), Japan (3.4%) South Asia 12.3% India (7.1%), Bangladesh (2.0%), Sri Lanka(1.4%) Central Asia 0.2% Kazakhstan (0.1%), Uzbekistan (0.1%) 2 Singapore 8.1% 7 Hong Kong 10.9% Total 81.6% Asia Asia 81.6% 3 Thailand 5.0% 8 Japan 24.2% 4 China 21.4% 9 UAE 0.9% Africa 0.3% Middle East 7.9% Europe 3.1% Note: Excludes transfer and transit passengers Australia & NZ 7.1% 5 India 9.2% 10 Taiwan 13.6% 16

17 KLIA Aeropolis - Air Cargo & Logistics 17

18 KLIA Aeropolis: Long Term Earnings Driver A ~50 YEARS DEVELOPMENT PLAN TOTAL KLIA LAND AREA 22,280ac AEROPOLIS 9,060ac constitutes 40% of total land area AIRPORT & AERONAUTICAL 13,220ac LEGEND: 18

19 KLIA Aeropolis : Air Cargo & Logistics ASEAN ecommerce expected to grow 16x by 2025, reaching $88 billion (~32% CAGR) 20 acres conversion of LCCT to KLIA Air Cargo Terminal 1 (KACT1) Already signed 3 Memorandum of Understanding (MoU) for KACT1 with: POS Aviation Raya Airways AirAsia ecommerce Handling Digital Free Trade Zone (DFTZ) to foster SMEs growth in ecommerce market and air cargo volumes On 22 March 2017 during the launch of the DFTZ, MAHB signed a MoU with Cainiao Network. Under this MoU, the parties will collaborate to explore the potential for developing a regional e-commerce and logistics hub in KLIA Aeropolis. 19

20 Recognition for Operational & Financial Excellence 20

21 Recognised for operational & financial excellence Operational Excellence 2016 Ranked 9 in ASQ (>40 mppa) - KUL 2016 Best Airport by size (2-5 mppa) - LGK 2017 Asia-Pacific Green Airports Recognition (>25mpps) Platinum Award - KUL 2016 World s Best Airports For Immigration Services Award - KUL 2016 Airport Carbon Accreditation Level 2 - KUL 2016 Malaysia Best Employer Brand Award Financial Excellence 2016 Malaysia Sustainability Reporting Award 2016 Top 20 Constituent of the FTSE4GOOD Bursa Malaysia ESG Index 2016 International Financing Review (IFR) Asia Loan of the Year 2016 Most Innovative Islamic Finance Deal of the Year in Southeast Asia 2016 Best Malaysian Company for Investor Relations 21

22 Corporate Outreach 22

23 Community-Friendly Organisation SUPPORTING WILDLIFE CONSERVATION IN CONJUNCTION WITH INDULGE & EXPLORE CAMPAIGN Wildlife conservation awareness in conjunction with the Indulge & Explore Campaign RURAL ENTREPRENEURSHIP SUPPORT PROGRAMME Contributed to Min House Camp, Kelantan as part of our initiatives in supporting local economic development UPSR WORKSHOP UNDER THE BEYOND BORDERS BANNER Collaboration with various Pejabat Pendidikan Daerah to assist teachers and students in raising language proficiency levels among school children COMMUNITY SUPPORT PROGRAMME AT TUANKU MIZAN MILITARY HOSPITAL Contributed wheelchairs and television to enhance facilities in the hospital for the national heroes who contributed to the peace and harmony of the country COMMUNITY SUPPORT PROGRAMME IN TERENGGANU Contributed to eligible students from SK Pulau Redang and SK Teluk Ketapang as well as Kg Pulau Redang Mosque and Tunas Harapan Darul Hilmi House BEYOND BORDERS ADOPTION PROGRAM Improving basic literary skills via reaching out to the community schools surrounding our airports 23

24 Summary 24

25 Summary 1. Key Highlights Launch of Runway to Success 2020 KLIA Seamless Connectivity Launch of KLIA Aeropolis Operational and Financial Excellence Extension of OA by 35 years 2. Runway to Success KLIA Seamless Connectivity Seamless connectivity between FSC and LCCs KLIA s growth outpacing industry peers Providing greater connectivity for Malaysia 4. KLIA Aeropolis Long term earnings driver ecommerce to drive Air Cargo & Logistics growth 5. Corporate Outreach Community-Friendly Organisation KUL Hub - Route Development; Seamless Connectivity Total Airport Experience - Elevating Experience for Passengers 6. Financial Highlights KLIA Aeropolis - Transforming to an Economic Enabler International - Adding Value to ISG and Exploring Opportunities EBITDA Dividend per Share Share Price, Higher Market Capitalisation Non-aeronautical Revenue 25

26 18 th Annual General Meeting Financial Performance of the Group Y.M. Raja Azmi Raja Nazuddin Chief Financial Officer 26

27 Financial Highlights 27

28 FY16 Headline Key Performance Indicator (KPI) FY16 Target FY16 Actual FY15 Actual Excl. EI & Adj. 1 Actual Incl. EI & Adj. 1 Profitability (EBITDA) RM1,716.0mil RM1,709.9mil RM1,580.6mil RM1,679.1mil Malaysia Operations EBITDA 2 RM902.1mil RM990.9mil RM880.1mil RM978.6mil Turkey Operations EBITDA EUR180.9/ RM813.9mil RM719.1mil RM700.5mil RM700.5mil Airport Service Quality (ASQ) > 40 mppa: KLIA Ranking Top 10 > 40 mppa: KLIA Ranking Top 9* > 40 mppa: KLIA Ranking Top 8 1 Exceptional items 2 Inclusion of Qatar project repair & maintenance segment * ASQ official ranking for FY16 as at 8 February

29 Achieving commendable financial growth Passengers (mil) EBITDA (RM mil) Dividend (sen/share) Share Price (RM) , ,580.6 * 8.5 The achievements are due to continuous effort to facilitate passengers and airlines needs to cater for growing travel demand * Core EBITDA 29

30 Strong headline results across the Group despite challenging environment Revenue RM3,214.0mil FY16 v FY % RM958.8mil FY16 v FY % RM4,172.8mil FY16 v FY % Aero Revenue RM1,563.9mil RM250.0mil RM990.9mil +9.9% +4.3% +1.3% RM498.7mil RM10.0mil RM719.1mil +4.6% (-18.1%) RM2,062.6mil Non Aero Revenue RM1,400.1mil +8.6% RM450.1mil +4.6% RM1,850.2mil +7.6% Non-Airport Operations EBITDA +2.7% RM260.0mil RM1,709.9mil +8.6% +3.2% +1.8% Passengers 89.0mil +6.1% 29.7mil +4.8% 118.6mil +5.8% Aircrafts Movements 811,592 (-0.5%) 220, % 1,031, % Malaysia Operations Performance (comprising of Malaysia & Qatar operations) Turkey Operations Performance (comprising of ISG & LGM operations) Group Performance 30

31 Diversified revenue streams: Higher Non-Aeronautical Revenue Contributions Aero: 49.4% Non-Aero: 50.6% Aeronautical Rental Retail Non-Airport FY16 Revenue RM 2,062.6 mil RM 1,110.2 mil RM mil RM mil % of revenue 49.4% 26.6% 17.7% 6.2% Key revenue streams Passenger Service Charges (PSC) Landing & Parking MARCS Rental & Royalties Car park Advertising Aeropolis Duty Free Non-dutiable goods Maintenance and technical services Sama - Sama hotel ISG Airport Hotel Oil palm plantation 31

32 KLIA accounts for more than half of non-aero contributions Robust commercial growth at KLIA in 2016 Key drivers for non-aero growth Passenger (mil) 7.6% Sales (RM mil) 12.6% 1, , Sales Per Pax (RM) 4.7% Occupancy Rate (%) % 84.1 Airports that drive higher non-aero revenues generate more profits Improved passenger and retailer experience from Total Airport Experience and targeted marketing promotions to drive next level of commercial growth

33 Efficiencies in Airport Operations revenue and costs for Malaysia (RM) Revenue per airport operations staff 15.9% (FY16: RM406,548; FY15: RM350,898) (RM) Despite increase in user fees, operating costs per pax remained flat for FY FY15 FY FY15 FY16 Aero Revenue Per Pax Non-Aero Revenue Per Pax Operating Cost Per Pax Non Operating Cost Per Pax Airport Operations Revenue Per Pax Airport Operations Cost Per Pax 33

34 FY16 Key Highlights (1 of 2) Record high revenue and EBITDA achieved in FY16 with Malaysia operations surpassing expectations, mitigating lower passenger growth in Turkey Malaysia operations contributing strongly to FY16 EBITDA Passenger growth 6.1% exceeding forecast of 2.5%, with revenue per pax also 3.6% KLIA passenger traffic above the 50 million mark for the first time, 7.6% to 52.6mil pax and growing faster than Singapore Changi, Bangkok Suvarnabhumi, Jakarta Soekarno - Hatta and Hong Kong Revenue for Malaysia 8.9% due to solid growth in both aero & non-aero operations Malaysia EBITDA of RM990.9mil achieved 109.8% of target Improved collections resulting in higher operating cash flows Malaysia retail revenue 10.0% to RM740.0mil, rental and commercial revenue 7.0% to RM659.4mil Challenging year for passenger growth in Turkey ISG s traffic despite security incidents and visa restrictions as traffic was still driven by resilience in domestic and outbound demand Despite the decline in international passengers, EBITDA from Turkey operations still 2.7% to RM719.1mil or 87.4% of target On-going infrastructure developments in and around ISG bodes well for improved connectivity and sustainable passenger growth at ISG 34

35 FY16 Key Highlights (2 of 2) Reaffirmed ratings and positive outlook for 2017 AAA rating reaffirmed and higher dividends for FY16 proposed final dividend payout (FY16: 6.0sen; FY15: 4.5sen) ~19% foreign shareholding spread as at 31 December 2016; increased to ~22% as at 31 March 2017 Repayment of RM250mil subordinated sukuk and EUR20mil senior term facility during the year Significant developments in FY17 bodes well for MAHB Improved pax growth for April 2017 with Malaysia 16.9% (KLIA 19.6%, non KLIA 10.9%) and Turkey 8.1% Further increase in seat capacity offered by Malindo, the AirAsia Group and Malaysia Airlines for the immediate future also provides a positive outlook for new airlines, Lucky Air, Himalaya Airlines and US-Bangla Airlines already flying to KLIA in 2017, with Philippine Airlines returning in June 2017 Malaysia will also be hosting the Visit Asean@50 Campaign in conjunction with the Kuala Lumpur 2017 Sea Games Continued initiatives by the Government and MAHB to attract more guests from China and India also bodes well for inbound tourism to the country 35

36 DPS(sen) Adjusted PATAMI (RM mil) Dividend payments are on an upward trend Dividend Payment per Share (sen) Interim DPS (sen) Final DPS (sen) PATAMI (Adjusted) * * Year Amount Paid (RM'mil) Dividend Per Share (sen) * A final single-tier dividend of 6.00 sen per ordinary share of MAHB in respect of the financial year ended 31 December 2016 has been proposed on 28 February 2016, subject to the approval of the shareholders of the Company at the 2016 Annual General Meeting 36

37 Significant gains in MAHB share price MAHB Share Price (RM) MAHB s Market Capitalization increased from RM9.1 billion to RM14.5 billion MAHB shares increased from RM5.50 to RM8.76 KLCI Index 1, th Annual General Meeting KLIA Aeropolis Launch KLCI MAHB 8.76* 1, , Ex-Date for Interim Dividend for FY16 (4.0 sen) Signed MOU with Cainiao Network for potential e- commerce hub Announcement RtS2020 of Proposed 4.00 Launch Final Dividend for FY (6.0 sen) 4/1/2016 4/4/2016 4/7/2016 4/10/2016 4/1/2017 4/4/2017 1, , , , *Share price as at 25 May

38 International passenger movements now accounts for half of total movements Pax mil International traffic as at 1Q17 has reached 50% of overall passenger movements for the first time since 1Q13 when Malaysia Airlines joined the oneworld Alliance 25.0 MY Int'l MY Domestic ISG Int'l ISG Domestic Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 38

39 1Q17 Key Performance Indicator (KPI) Achievements FY17 Target 1Q17 Actual 1Q16 Actual FY16 Actual Profitability (EBITDA) RM1,796.6mil RM497.5mil RM452.6mil RM1,709.9mil Malaysia Operations EBITDA 1 RM1,001.6mil RM333.0mil RM284.2mil RM990.9mil Turkey Operations EBITDA RM795.0mil RM164.5mil RM168.4mil RM719.1mil Airport Service Quality (ASQ) > 40 mppa: KLIA Ranking Top 12 > 40 mppa: KLIA Ranking Top 11* > 40 mppa: KLIA Ranking Top 10 > 40 mppa: KLIA Ranking Top 9 1 Including project repair & maintenance segment in Qatar * ASQ Official ranking for 1Q17 as at 20 April

40 MSWG Queries 40

41 MSWG Queries for AGM: 1 of 7 The Group recorded higher operating revenues that were attributable to the improved results from airport operations segment which grew by 8.1% to RM3,912.8 million and revenue from non-airport operations segments that grew by 3.2% to RM259.9 million for FY16. Does the Board expect this trend to continue in FY17? The Group expects the trend of higher operating revenues to continue for the financial year ending 31 December 2017 as evident in the results for the first three months ended 31 March 2017 (1Q17). Revenue for the Group s airport operations and non-airport operations segments grew by 6.7% and 15.9% respectively in 1Q17 against the same period in The growth in revenue is premised on the 2017 passenger growth forecast for the Group s operations in Malaysia and Turkey of 6.5% and 7.2% respectively. The Group has set a Headline Key Performance Indicator (KPI) for earnings before interest, tax, depreciation and amortisation (EBITDA) of RM1,796.6 million for the financial year ended 2017, an increase of 5.1% over

42 MSWG Queries for AGM: 2 of 7 Under Airport Services, non-aeronautical revenue rose by 7.1% to RM659.2 million due to more aggressive campaigns and high occupancy rate resulting from increase in retail space at klia2. What is the current occupancy rate and is the Company expecting to maintain this rate for FY17? The occupancy rate at klia2 is 76% as at 31 December The current maximum occupancy rate is set at 80% to cater to the current passenger level at klia2 of 27 million passengers and as such there is room to further increase the occupancy rate at klia2. The remaining 20% retail space will be incrementally released to match the growth in passenger numbers as klia2 reaches its 45 million passenger per annum design capacity. 42

43 MSWG Queries for AGM: 3 of 7 It was reported in the Management Discussion and Analysis that MAHB s major management contract at the Hamad International Airport in Qatar had been extended by three years and the Company was also awarded additional sub-contracts at the airport. Could the Board share more information on these additional sub-contracts? The Group s operations in Qatar is managed by Malaysia Airports Consultancy Services Middle East LLC (MACS ME). MACS ME has been successful in securing several management contracts at the Hamad International Airport (HIA) since In June 2016, MACS ME was awarded an extension of a Facilities Management Services contract for Airport Operational Facilities and Ancillaries (FM0009 Contract) at HIA. The extension is for an additional 3 year period commencing from 18th June The extension of the FM0009 Contract also includes additional sub-contracts (Change Order) awarded to MACS ME, namely as follows:- Change Order No. 1 Provision of Facility Management for Employee Canteen Food Production Equipment at HIA Change Order No. 2 Provision of Combustion Fuel for Solid Waste Handling Facility at HIA The combined contract value for the extension of the FM0009 Contract and the associated change orders amounts to QAR163,947, (or approximately RM200,015,386.00) over the 3 year period. 43

44 MSWG Queries for AGM: 4 of 7 It was reported that on 17 March 2017, an alleged baggage strike had caused the delay of more than 50 flights at the Kuala Lumpur International Airport (KLIA) due to a change in the roster which was not agreed upon by the workers handling the baggage. What are the measures taken by the Board to ensure such incidents do not recur in the future? Baggage handling activities at all airports in Malaysia, including KLIA, are under the purview of third party ground handlers which are appointed by the respective airlines. The baggage strike incident on 17 March 2017 occurred because of manpower shortages faced by the airline appointed third party ground handler, AeroDarat Services Sdn Bhd (AeroDarat). The shortage was triggered by a change in shift patterns and rosters on AeroDarat s part. MAHB had acted quickly by sending its staff to assist AeroDarat in the management of the baggage. As a responsible airport operator, MAHB regularly engages with all its partners in mitigation action and strategies under the KLIA Business Continuation Plan. Planned investments in new equipment by the ground handlers and closer monitoring by the relevant stakeholders, including the Malaysian Aviation Commission, will also minimise any potential disruptions to the airline and airport operations. 44

45 MSWG Queries for AGM: 5 of 7 It was announced on 5 May 2017 that MAHB reached a settlement via negotiation with KLIA Consultancy Services Sdn Bhd (KLIACS) and Straits Consulting Engineers Sdn Bhd (SCE). It was reported earlier that MAHB had sought claims against KLIACS of up to RM148.9 million plus interest, cost and any other relief that the arbitrator might deem to fit and just. The claim against SCE amounted to RM84.31 million, as well as interest, costs and any other relief that the arbitrator decided to give. What was the amount of the settlement reached with KLIACS and SCE? With regard to the amount of settlement reached between MAHB and KLIACS as well as SCE, we are unable to disclose such information as we are bound by confidentiality obligations as set out in the settlement agreement with KLIACS and SCE, respectively. At the time of print, we have requested for a written consent from KLIACS and SCE to disclose the settlement sum but we have yet to receive their reply. We hope to update the Minority Shareholders Watchdog Group with the amount of settlement in due course. 45

46 MSWG Queries for AGM: 6 of 7 What is the Group s plans for its 11% stake in the Rajiv Gandhi International Airport Hyderabad? Given the progressive passenger traffic growth in Hyderabad, the airport offers great potential for organic growth and profitability. Nonetheless, the Group is open to any strategic opportunities that will unlock shareholder value. 46

47 MSWG Queries for AGM: 7 of 7 The Istanbul Sabiha Gokcen International Airport (ISG), reported a core loss before tax of RM56.7 million in FY16 compared with a Profit Before Tax (PBT) of RM29.9 million in FY15, prior to reflecting the amortisation of fair value of concession rights. Is the Group expecting the ISG airport to improve its performance for FY17? 2016 was far more challenging than the Group anticipated for ISG as Turkey was hit by a series of security incidents and an attempted coup, resulting in lower passenger growth and lower international passengers for ISG and Turkey as a whole. The Group is optimistic on the continued recovery of ISG's performance in 2017 in view of the political and security stability, which is a key influence for international traffic growth. This year, ISG is forecasting a 7.2% growth in the overall passenger number, translating to a total of 31.8 million passengers. Based on the April 2017 monthly operating statistics, we begin to see positive signs of passenger traffic recovery with ISG registering a overall growth of 8.1% with international traffic also growing by 16.0% against April Furthermore, traffic during the summer months is typically the strongest for the year and this bodes well for ISG as we continue to enjoy further international passenger growth which yields a higher revenue per passenger contribution. With the support of the rapidly improving connectivity to and around ISG and the completion of the second runway in 2018, the Group will continue to derive value from its investment in Turkey and enjoy organic growth. 47

48 18 th Annual General Meeting AGM Agenda 48

49 Agenda 1 To receive the Audited Financial Statements for the financial year ended 31 December 2016 together with the Directors and Auditors Reports thereon. Explanatory Note: The Audited Financial Statements is laid in accordance with Section 340(1)(a) of the Companies Act 2016 (CA 2016) and meant for discussion only as the Audited Financial Statements do not require shareholders approval under the provision of Section 251(1) of the CA As such, this Agenda item is not to be put forward for voting. 49

50 Agenda 2 (Resolution 1) To declare and approve the payment of a final single-tier dividend of 6 sen per ordinary share in respect of the financial year ended 31 December 2016 as recommended by the Directors. 50

51 Agenda 3 (Resolution 2) To approve the payment of Directors fees totalling RM1,037, to the Non-Executive Directors of MAHB for the financial year ended 31 December Directors Fee structure approved by shareholders at the 14th AGM held on 28 March 2013: Fee Chairman Non-Executive Director Monthly: RM15, Monthly: RM9, Directors Fee Annually: RM180, Annually: RM108,

52 Agenda 4 (Resolution 3) cont d To approve the payment of Directors fees up to an amount of RM2,400, to the Non Executive Directors of MAHB, as follows: i. MAHB amounting to RM1,740, with effect from 1 January 2017 until the next AGM of the Company; and ii. MAHB Subsidiaries amounting to RM660, with effect from 1 June 2017 until the next AGM of the Company Directors Fee structure: No. Description Chairman NEDs 1. MAHB Directors Fee RM15,000 per month RM9,000 per month 2. Directors Fees for MAHB Subsidiaries: (The payment of the Directors Fees for MAHB Subsidiaries will only be effective in 1 June 2017.) 1. First Tier Companies RM4,000 per month RM3,000 per month 2. Second Tier Companies RM3,000 per month RM2,000 per month 52

53 Explanatory Note for Agenda 4 (Resolution 3) cont d Details of estimated amount of RM2,400, for the Directors fees, as tabulated as follows: Company 1 January 2017 until 31 May 2017 (5 Months) 1 June 2017 until the next AGM in 2018 (i.e. May 2018) (12 Months) Total MAHB RM480, RM1,260, RM1,740, MAHB Subsidiaries (10 Subsidiaries) No Directors fee paid for this period RM660, RM660, Total RM2,400,

54 Agenda 5 (Resolution 4) To approve the payment of Directors benefits payable up to an amount of RM2,169, to the Non-Executive Directors of MAHB with effect from 1 January 2017 until the next AGM of the Company, as follows: (i) MAHB amounting to RM1,697,210.00; and (ii) MAHB Subsidiaries amounting to RM471,

55 Agenda 5 (Resolution 4) cont d The benefits payable for NEDs is as set out below: No. Description Chairman/ NEDs/ per month per month 1. Senior Independent Director s Allowance of MAHB RM1, Meeting Allowance (per meeting) A. MAHB (i) Board RM5,000 RM3,000 (ii) Board Committees RM4,000 RM2,000 B. Board of MAHB Subsidiaries (i) The following rate of meeting allowance is from 1 January 2017 until 31 May 2017: (a) First Tier Companies RM3,500 RM3,000 (b) Second Tier Companies RM3,000 RM2,000 (ii) The following rate of meeting allowance rate will be effective from 1 June 2017 onwards: (a) First Tier Companies RM1,500 RM1,200 (b) Second Tier Companies RM1,200 RM1,000 55

56 Agenda 5 (Resolution 4) cont d No. Description Chairman/ per month NEDs/ per month C. Committee of MAHB Subsidiaries (i) The following rate of meeting allowance is from 1 January 2017 until 31 May 2017: (a) ISG RM2,500 RM2,000 (b) LGM RM2,500 RM2,000 (ii) The following rate of meeting allowance rate will be effective from 1 June 2017 onwards: (a) ISG and LGM# RM2,500 RM2,000 D. Management Committee of MAHB (i) Land Development Advisory Committee RM3,500 RM3,000 (ii) Whistleblowing Independent Committee RM1,500 RM1,000 (iii) Other new Corporate Committe RM1,500 RM1, Other Claimable Benefits Directors appreciation gift, out of pocket expenses, retirement benefits, car allowance*, entertainment allowance*, petrol*, toll, telecommunication devices, club and professional membership and other claimable benefits *Chairman Only # Deemed as one meeting due to the fact that the contents of meeting similar in nature and meetings are held on the same day. 56

57 Explanatory Note for Agenda 5 (Resolution 4) cont d Details of estimated amount of RM2,169, for the Directors fees, as tabulated as follows: Company/Payment Period 1 January 2017 until 31 May 2017 (5 Months) 1 June 2017 until the next AGM in 2018 (i.e. May 2018) (12 Months) MAHB RM406, RM1,291, RM1,697, MAHB Subsidiaries (10 Subsidiaries) Total RM189, RM282, RM471, Total RM595, RM1,573, RM2,169,

58 Agenda 6 (Resolution 5) To re-elect Datuk Ruhaizah binti Mohamed Rashid who shall retire in accordance with Article 129 of the Company s Constitution and who being eligible, offers herself for re-election. 58

59 Agenda 7 (Resolution 6) To re-elect Dato Ir. Mohamad bin Husin who shall retire in accordance with Article 129 of the Company s Constitution and who being eligible, offers himself for re-election. 59

60 Agenda 8 (Resolution 7) To re-elect Datuk Azailiza binti Mohd Ahad who shall retire in accordance with Article 129 of the Company s Constitution and who being eligible, offers herself for re-election. 60

61 Agenda 9 (Resolution 8) To re-elect Datuk Mohd Badlisham bin Ghazali who shall retire in accordance with Article 131 of the Company s Constitution and who being eligible, offers himself for re-election. 61

62 Agenda 10 (Resolution 9) To re-elect Dato Mohd Izani bin Ghani who shall retire in accordance with Article 131 of the Company s Constitution and who being eligible, offers himself for re-election. 62

63 Tunku Dato Mahmood Fawzy bin Tunku Muhiyiddin, a Non-Independent Non-Executive Director, who also retires by rotation pursuant to Article 131 of the Company s Constitution does not offer himself for reelection. Hence, he will retire at the conclusion of the 18th AGM. Article 131 of the Company s Constitution expressly states that in every subsequent AGM, at least one-third of the Directors for the time being shall retire from office and the retiring Directors shall be eligible to seek for reelection thereof. 63

64 Agenda 11 (Resolution 10) To re-appoint Messrs. Ernst & Young as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration. Explanatory Note: The Board Audit Committee (BAC) and the Board of MAHB have considered the reappointment of Messrs. Ernst & Young (EY) as Auditors of the Company and collectively agreed that EY has met the relevant criteria prescribed under Paragraph of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. 64

65 Notes 65

66 Notes 66

67 THANK YOU 67

68 MALAYSIA AIRPORTS HOLDINGS BERHAD MALAYSIA AIRPORTS CORPORATE OFFICE PERSIARAN KORPORAT KLIA KLIA SEPANG, SELANGOR TEL: FAX: