Muhibbah's Cambodian airports faring well
Last month, we looked at Muhibbah Engineering (M) Bhd's newly secured Yemen LNG contract. Today, we take a look at its airport concession operations in Cambodia.
Muhibbah's concessions comprise the Cambodian airports, Roadcare (M) Sdn Bhd (to maintain 5,000km of federal roads in the central states of Malaysia) and ITS Konsortium Sdn Bhd (which handles the Klang Valley integrated transport information system). They contributed RM12.9 million, or 41% of Muhibbah's pre-tax profit of RM31.7 million in the first half of 2006.
Airport concessions
Muhibbah's Cambodian airport operations are held by 30%-owned Societe Concessionaire des Aeroports (SCA). The remaining 70% is held by Vinci, a leading French-based construction and concession conglomerate. Despite its smaller stake, Muhibbah -- far from being a passive partner –- has seconded key management staff to SCA and major decisions are made jointly.
Its venture into the privatisation of Cambodia's airports started in the mid-1990s and has paid off well, confounding initial country risk fears. The decision to invest then has given Muhibbah and SCA the first mover advantage with regard to further investments into Cambodia's infrastructure.
SCA was awarded the concession for the international airport in Phnom Penh in 1995 and Siem Reap in 2001. Both concessions were originally scheduled to end in 2020, but have since been extended to 2040 following the award this year of a third international airport in Sihanoukville.
To date, SCA has invested over US$130 million (RM475.49 million) to upgrade the Phnom Penh and Siem Reap airports, funded mainly from the World Bank and Proparco, a French state-owned financing arm. The two airports employed over 1,000 staff and handled over two million passengers in 2005.
In late August 2006, SCA officially opened a new international terminal at the Siem Reap International Airport to cope with increasing passenger traffic. The new terminal cost approximately US$19 million, with a built-up space of 12,000sq m and can handle up to 1.5 million passengers per year.
Sihanoukville airport
Sihanoukville is Cambodia's only deep-sea port and a major beach resort town. It houses many of Cambodia's industries (garment is the biggest industry in Cambodia), as well as an emerging oil and gas industry in the Gulf of Thailand. With enhanced air transportation links, Sihanoukville will be promoted as a major beach resort and industry base.
The existing small airport in Sihanoukville can only cater for small private jets. Up to US$50 million will be invested in the first phase, to be completed in two years, which will allow for regional flights from neighbouring countries. The next phase of expansion of up to US$200 million will enlarge the airport's operations significantly by 2009.
Strong traffic growth
Cambodia is enjoying strong growth in tourism as new direct flights and the increasing popularity of the Angkor Wat temple complex, a Unesco World Heritage site, draws new visitors. According to government statistics, total tourist arrivals into Cambodia rose 35% to 1.4 million in 2005, with those arriving by air rising 37% to 856,521.
Between 1998 and 2005, passenger traffic at the Phnom Penh airport nearly doubled from 595,432 people to 1.081 million. The Siem Reap airport registered much stronger growth, with passenger traffic increasing from 428,925 people in 1998 to 1.038 million in 2005.
Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.
Muhibbah's concessions comprise the Cambodian airports, Roadcare (M) Sdn Bhd (to maintain 5,000km of federal roads in the central states of Malaysia) and ITS Konsortium Sdn Bhd (which handles the Klang Valley integrated transport information system). They contributed RM12.9 million, or 41% of Muhibbah's pre-tax profit of RM31.7 million in the first half of 2006.
Airport concessions
Muhibbah's Cambodian airport operations are held by 30%-owned Societe Concessionaire des Aeroports (SCA). The remaining 70% is held by Vinci, a leading French-based construction and concession conglomerate. Despite its smaller stake, Muhibbah -- far from being a passive partner –- has seconded key management staff to SCA and major decisions are made jointly.
Its venture into the privatisation of Cambodia's airports started in the mid-1990s and has paid off well, confounding initial country risk fears. The decision to invest then has given Muhibbah and SCA the first mover advantage with regard to further investments into Cambodia's infrastructure.
SCA was awarded the concession for the international airport in Phnom Penh in 1995 and Siem Reap in 2001. Both concessions were originally scheduled to end in 2020, but have since been extended to 2040 following the award this year of a third international airport in Sihanoukville.
To date, SCA has invested over US$130 million (RM475.49 million) to upgrade the Phnom Penh and Siem Reap airports, funded mainly from the World Bank and Proparco, a French state-owned financing arm. The two airports employed over 1,000 staff and handled over two million passengers in 2005.
In late August 2006, SCA officially opened a new international terminal at the Siem Reap International Airport to cope with increasing passenger traffic. The new terminal cost approximately US$19 million, with a built-up space of 12,000sq m and can handle up to 1.5 million passengers per year.
Sihanoukville airport
Sihanoukville is Cambodia's only deep-sea port and a major beach resort town. It houses many of Cambodia's industries (garment is the biggest industry in Cambodia), as well as an emerging oil and gas industry in the Gulf of Thailand. With enhanced air transportation links, Sihanoukville will be promoted as a major beach resort and industry base.
The existing small airport in Sihanoukville can only cater for small private jets. Up to US$50 million will be invested in the first phase, to be completed in two years, which will allow for regional flights from neighbouring countries. The next phase of expansion of up to US$200 million will enlarge the airport's operations significantly by 2009.
Strong traffic growth
Cambodia is enjoying strong growth in tourism as new direct flights and the increasing popularity of the Angkor Wat temple complex, a Unesco World Heritage site, draws new visitors. According to government statistics, total tourist arrivals into Cambodia rose 35% to 1.4 million in 2005, with those arriving by air rising 37% to 856,521.
Between 1998 and 2005, passenger traffic at the Phnom Penh airport nearly doubled from 595,432 people to 1.081 million. The Siem Reap airport registered much stronger growth, with passenger traffic increasing from 428,925 people in 1998 to 1.038 million in 2005.
Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.
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