RAM Ratings affirms MAHB’s senior debt ratings at AAA/Stable

Published on 17 Nov 2023.

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RAM Ratings has affirmed the ratings of Malaysia Airports Holdings Berhad’s (MAHB or the Group) sukuk facilities (Table 1). The affirmation is premised on our view that MAHB’s operating performance and financial profile will continue to improve on the back of a recovery in passenger traffic. 

MAHB is the sole operator of all 39 government-owned airports in Malaysia – a key rating strength. This factor is supported by still-favourable long-term industry prospects, MAHB’s prudent financial management and the diversification benefit from its operation of Sabiha Gokcen International Airport (SGIA) in Türkiye. The ratings further consider the high likelihood of extraordinary support from the Government of Malaysia. The Group’s vulnerability to external events and regulatory uncertainties however, continues to constrain its ratings.

Passenger traffic continued to rise this year despite high ticket prices and economic headwinds. Passenger movement at MAHB’s domestic airports jumped 72% y-o-y to 60.68 mil in 9M 2023, reaching 78% of the 9M 2019 level. The pace of recovery at SGIA remained faster, given that restrictions were lifted much earlier. Passenger traffic of 28.1 mil for 9M 2023 (+23% y-o-y) surpassed pre-crisis level amid sturdy demand, aided by a weak lira. The overall traffic performance of the Group’s local airports is on track to meeting our full-year projections while that of SGIA is likely to exceed our forecast. 

Looking ahead, healthy airline capacity and load factors are envisaged to continue to drive passenger movement. Domestically, we expect full recovery to pre-crisis levels in 2025. Passenger traffic at SGIA will be sustained in view of healthy travel demand, encouraged by the weak lira, although there may be some near-term dampening of demand due to renewed conflicts in the Middle East. 

Amid the rebound in traffic, the Group returned to the black last year with an operating profit before depreciation, interest and tax (OPBDIT) of RM926.8 mil, which more than doubled y-o-y to RM862.3 mil in 1H FY Dec 2023. Adjusted OPBDIT for both periods after deducting hefty concession fees for SGIA came up to a respective RM362.0 mil and RM328.6 mil. We expect the Group’s adjusted OPBDIT to range between RM800 mil and RM900 mil this year before rapidly improving in the next one to two years to close to pre-pandemic levels.

MAHB’s adjusted debt level trended down since fiscal 2021, reaching RM5.5 bil by end-June 2023 amid undemanding capital expenditure (capex). Adjusted funds from operations (FFO) and operating cash flows were substantially stronger in fiscal 2022 and 1H fiscal 2023 but fell short of expectations owing to SGIA concession fees (which had been assumed to resume only in 2023). Adjusted FFO debt coverage (FFODC) was an improved 0.10 times and 0.17 times, annualised, respectively. With projected debt levels of RM5.0 bil-RM5.5 bil for this year and the next, the corresponding adjusted FFODC is forecasted to increase to 0.20 times-0.30 times.

The finalisation of MAHB’s new operating agreements (OAs) has been further delayed, although the government approved in principle material terms of the agreements in February this year. Despite some uncertainty from the hold-up, MAHB’s rights and benefits under existing OAs remain intact.


Table 1: MAHB ratings


  1. The ratings of MAHB’s RM2.5 bil and RM5.0 bil Senior Sukuk Programmes reflect the Group’s credit profile. The instrument ranks pari passu
    with the Group’s senior unsecured borrowings.
  2. MAHB’s RM2.5 bil and RM5.0 bil Perpetual Subordinated Sukuk Programmes are rated two notches below its long-term corporate credit rating
    to reflect the risk of deferrable profit distributions and the deeply subordinated rights of the sukukholders to claims in the event of insolvency.
  3. The rating of MAHB’s RM3.1 bil Islamic MTN Programme (under Malaysia Airports Capital Berhad) is linked to the Group’s senior rating as
    the Islamic structure of the facility provides recourse to MAHB by virtue of its obligations under a purchase undertaking.


Analytical contacts
Karin Koh, CFA 
(603) 3385 2508

Thong Mun Wai 
(603) 3385 2522

Media contact
Sakinah Arifin
(603) 3385 2500


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2023 by RAM Rating Services Berhad

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