Kuala Lumpur-listed Muhibbah Engineering (M) Bhd, which owns a 21 per cent stake in Cambodia Airports, expects two consecutive years of growth in 2021-2022 from its business in the Kingdom as Covid-19 vaccination campaigns gather pace globally.
MIDF Amanah Investment Bank Bhd Research (MIDF Research) noted that effective immunisation drives around the world would buoy the rate of recovery in airport traffic and potentially bring higher earnings visibility for the group from its concession business, online news portal Malaysia Reserve reported on April 1.
“We are of the view that the outlook of its 21 per cent owned Cambodia Airports, which predominantly constitute up to 70 per cent of the group’s earnings, is set to be on a gradual recovery over the next two years on the back of accelerated Covid-19 vaccination drive across the globe, especially China, the US and Southeast Asia,” MIDF Research said in a March 31 report, according to Malaysia Reserve.
Cambodia Airports is the long-standing owner and manager of Cambodia’s three international airports – Phnom Penh, Sihanouk and Siem Reap international airports.
The research house noted that there was likely to be a surge in international air travel once borders reopen, especially among Chinese passengers.
“We postulate that this likely phenomenon will improve the air traffic volume for the group’s Cambodia airports. To note, about one-third of travellers to the airport are [of] Chinese nationality.
“Therefore, the earnings recovery momentum for the group is seen to be positive moving forward, banking on the rebound in airfare growth in the region and traffic volume at its Cambodia airports,” Malaysia Reserve quoted MIDF Research as saying.
Cambodia Airports communications and public relations director Khek Norinda said it was still too soon for predictions on air traffic growth for this year at the Kingdom’s international airports as coronavirus cases continue to mount.
“The Covid-19 situation is very volatile globally and especially in Cambodia with the recent spikes [in confirmed infections], and the vaccine rollout is only at its early stage. Still, border restrictions and mandatory quarantines have hampered air travel.
“Overall, as a group with a long-term vision, we remain confident in the business and tourism opportunities offered by Cambodia and that’s why we have ensured that our investments are on par with the country’s development potential,” he said.
State Secretariat of Civil Aviation (SSCA) spokesman Sin Chansereyvutha told The Post last month that despite the availability of Covid-19 jabs in the Kingdom, people remain vigilant and are reluctant to fly.
“The aviation sector has not improved yet due to concerns over Covid-19 infections. So, uncertainty remains and we do hope that if the Covid-19 vaccination rollout proves to be relatively effective, the industry will show marked improvements,” he said.
Foreign tourist arrivals at the Kingdom’s three international airports saw a significant 82.8 per cent drop in 2020, from 4,404,995 in 2019 to a mere 756,265, data from the Ministry of Tourism show.
On the Bursa Malaysia, Muhibbah Engineering’s share price rose two sen (0.48 US cents) or 1.87 per cent to close at 1.09 ringgit ($0.26) on April 5 for a market capitalisation of 526.96 million ringgit, with 1.95 million shares traded.