KUALA LUMPUR (May 25): Malaysia Airports Holdings Bhd (MAHB) said it is tendering for some RM500 million worth of bids to manage airport facilities in the Middle East as it seeks to build a balanced portfolio of investments beyond the country — from equity acquisitions to management contracts.

Managing director Datuk Badlisham Ghazali said the tendering process, done via wholly-owned unit Malaysia Airports Consultancy Services Sdn Bhd and its affiliates, is also part of the airport operator's strategy to expand its expertise of providing ancillary facilities.

"Some of the bids are still in the preliminary process and will be tendered out accordingly," Badlisham told reporters after MAHB's annual general meeting today.

Through its subsidiary, MAHB has secured a three-year extension to its contract to manage facilities at the Hamad International Airport in Qatar, which is valued at 163.9 million riyal (RM192.5 million) and expires in June 2019.

MAHB, the fourth largest airport operator in the world by passenger movement, made its maiden overseas venture in 1995, with two airports in Cambodia: Siem Reap International Airport and Phnom Penh International Airport.

Badlisham expects MAHB to record a 6.5% growth in passenger traffic for the financial year ended Dec 31, 2017 (FY17), compared with a 6.1% growth in FY16, as it maintains its operating capital expenditure at around RM300 million to RM400 million.

"Our passenger traffic growth is tracking the economic growth in general, but it has always outperformed them," he said, noting that the higher growth expectation was on the back of increasing collaboration with tourism agencies to promote intra-Asian travel.

At the same time, Badlisham also said MAHB's top priority for FY17 was to turn its airport in Turkey, Istanbul Sabiha Gokcen International Airport, around. That airport reported a core net loss of RM56.7 million in FY16 against a pre-tax profit of RM29.9 million in FY15.

In its 2016 annual report, MAHB has set a target for its Turkish airport to post earnings before interest, tax, depreciation and amortisation of 172.8 million euro (about RM800 million), driven by growth in passenger traffic.

"Our guidance is that the Turkish airport will not be posting a worse result this year than last year," he said.

"Going into the summer, we saw stronger traffic growth in Turkey, recording an average of 4.8% in March and April this year. And with Russia opening up its market to Turkey, that's already a good news for economics and trade," he added.

On whether MAHB plans to monetise its 11% stake in the Rajiv Gandhi International Airport in Hyderabad, Badlisham said, "It is always a consideration as we look to increase the shareholder value."

On MAHB's strategy for international expansion, Badlisham said the group will continue to be "very prudent" in future acquisition of stakes in airport firms.

He also noted that the valuation of the airport-related acquisition deals has become more realistic as countries are starting to become more aware of the success in privatising airport operators.

"What we have seen is that the country's airport operators have become more prudent. They are not asking for too much, which will push up valuation," he said.

Badlisham noted that certain countries are structuring the deals based on a concept of "basket of airports".

MAHB's share price fell 16 sen or 1.83% to RM8.60, for a market capitalisation of RM14.27 billiion.