Malaysia Airports : Full Annual Report (75.44 MB)

A BREAKTHROUGH YEAR

A N N U A L R E P O R T 2 0 2 3

INSIDE THIS REPORT

04 06

PROLOGUE

2 Basis of this report

OUR INVESTMENT CASE

1. Malaysia Airports at a Glance

1. Where We Operate

1. Corporate Information
2. Corporate Structure

03

OUR LEADERSHIP STATEMENT

14 Chairman's Statement

26 Group Chief Executive Officer's Message

OUR VALUE CREATION STRATEGY

1. Our Approach to Value Creation

1. Value Creation Model

1. Our Strategy

1. Material Matters

1. Stakeholder Engagement

05

OUR PERFORMANCE

1. Financial Review

1. Operational Review

1. Our Approach to Sustainability

1. Sustainability Review

1. Sustainability Performance Data

1. Bursa Malaysia Indicators

1. GRI Content Index

1. Independent Assurance Statement

OUR GOVERNANCE

184 Board of Directors

1. Board of Directors' Profile

1. Group Senior Management

1. Group Senior Management's Profile

203 Subsidiaries Senior Management's Profile

208 Corporate Governance Overview Statement

1. Board Audit Committee Report

1. Statement on Risk Management and Internal Control

1. Dividend Policy
2. Additional Compliance Information

07

ADDITIONAL INFORMATION

1. Statement of Workforce
2. Airport Statistics

267 Analysis of Shareholdings

1. Share Price, Volume Traded and Market Capitalisation
2. List of Properties

1. Group Corporate Directory
2. Airport Directory
3. Notice of 25th Annual General Meeting

1. Statement Accompanying Notice of 25th Annual General Meeting
2. AGM Administrative Details
3. • Form of Proxy
   • Annual Report Requisition Form

A BREAKTHROUGH YEAR

In a breakthrough year, Malaysia Airports strode confidently into a growth era following a successful recovery from the pandemic. To signify this transition, we set a three- year strategy to identify and seize opportunities for expansion centred around reimagining the passenger experience at our airports.

We firmly believe that prioritising passengers in our strategic approach is key to maintaining the competitiveness of our airports and increasing market share, especially as the aviation industry anticipates rapid expansion. The cover of this Annual Report depicts the rapid pace of our efforts and our journey to a bright future for the Group and its stakeholders.

Culminating this pivotal year,

we achieved outstanding financial results as our Malaysian operations returned to profitability. 2023 has also stood out as one of the most profitable periods in our corporate history.

More information on this report More information on our website

www.malaysiaairports.com.my

BASIS

OF THIS

REPORT

INTRODUCTION

This Integrated Report has been prepared with reference to the principles of the International Integrated Reporting Framework

( framework) developed by the International Integrated Reporting Council (IIRC) and the recommendations in the Malaysian Code on Corporate Governance 2021 on integrated reporting.

This report aims to provide our stakeholders with transparent, relevant and integrated information of our business strategy, performance, and future prospects as well as environmental social and governance (ESG) considerations, leading to the creation of stakeholder value over the short, medium and long-term. We are guided by our vision to be 'A Global Airport Group that Champions Connectivity and Sustainability' and are resolute in our brand promise of 'Hosting Joyful Connections'.

APPLICABLE REQUIREMENTS AND STANDARDS

This report is prepared according to the following regulatory requirements:

• Main Market Listing Requirements of Bursa Malaysia Securities Berhad;
• Malaysian Financial Reporting Standards;
• International Financial Reporting Standards;
• Companies Act 2016;
• Malaysian Code on Corporate Governance 2021; and with reference to the voluntary standards for sustainability reporting:
• GRI Standards for Sustainability Reporting

VALUE CREATION MODEL

Our value creation model is disclosed on pages 40 to 43. It outlines our focus on value creation which is driven by championing connectivity as a global airport group and the sustainability of airport communities that we serve.

SCOPE AND BOUNDARY

This report covers our financial and non-financial performance during the period from 1 January 2023 to 31 December 2023. Information presented relates to the principal activities of the Group and all its subsidiaries, unless stated otherwise. Detailed information on investments in which Malaysia Airports has no controlling interest is not included.

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The full report is also available online on our corporate website at www.malaysiaairports.com.my

REPORTING SUITE

The Reporting Suite for 2023 is similar to last year and comprises this Annual Report, Financial Statements and Airport Statistics.

MATERIALITY

The content of our integrated report is dependent on the principle of materiality. We include matters that substantially affect the Group's ability to create and sustain value over the short, medium and long-term. These matters are identified, prioritised and validated through a materiality assessment process that is described in this report. Our strategic responses to these material matters are presented in pages 58 to 75.

FORWARD LOOKING STATEMENT

This report contains forward looking statements, for example, Malaysia Airports' future direction, strategies, and potential opportunities for growth. These statements are based on various assumptions and are subject to a number of risks, uncertainties and contingencies, many of which are beyond the control of the Group. Unanticipated events and actual future events may differ materially from current expectations due to new business opportunities, changes in priorities by the Group and other factors.

ASSURANCE

Malaysia Airports obtained independent third-party assurance for the following information:

Content	Assurance	Framework
Annual	Reasonable	•	Companies Act 2016
Financial	assurance	•	Malaysian Financial Reporting
Statements			Standards
		•	International Financial
			Reporting Standards
Statement	Limited	•	Bursa Malaysia Securities
on Risk	assurance		Berhad Listing Requirements
Management
and Internal
Control
Sustainability	Limited	• With reference to GRI
Review and	assurance		Standards for Sustainability
Indicators			Reporting

INFORMATION ON EXCLUSIONS

Malaysia Airports' disclosure appetite guides the limitation of information available in this report. Several requirements of the Framework have been excluded due to the unavailability of reliable information or specific legal prohibitions.

NAVIGATION ICONS

Six Capitals

1. Financial

1. Manufactured

1. Intellectual

1. Human

1. Social

1. Natural

Key Stakeholders
S1	Airlines	S8
S2	Regulatory Authorities	S9
S3	Passengers
S4	Business Partners	S10
S5	Employees	S11
S6	Capital Providers
S7	Tenants

Vendors and

Service Providers

Associations and

Professional Bodies

Media

Local Community

Material Matters

M1	Total Airport Experience
M2	Airport Safety and Security
M3	Economic Performance
M4	Cybersecurity and Data Privacy
M5	Regulatory Compliance
M6	Climate Change
M7	Integrity and Anti-Corruption
M8	Talent Attraction and Development

M9 Supply Chain Management

M10 Biodiversity

M11 Noise Management

M12 Market Presence

M13 Waste

M14 Human Rights

M15 Water Effluent

M16 Contribution to Local Community

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ANNUAL REPORT 2023

GLOBALLY, MALAYSIA AIRPORTS IS ONE OF THE WORLD'S LARGEST AIRPORT OPERATOR GROUPS, BASED ON THE TOTAL NUMBER OF PASSENGERS HANDLED ANNUALLY.

Manages

39

airports

throughout Malaysia

international	domestic	17 STOLports
5 airports	17 airports

Owns and manages 1 international airport in Istanbul, Türkiye

Our Investment case

Our Leadership Statement

OUR VISION

A Global Airport Group that Champions

Connectivity and Sustainability

BRAND PROMISE

Hosting Joyful Connections

CORE VALUES

Integrity, Customer-Centricity,

Accountability, New Ideas

Our Value Creation Strategy

Our Performance

Our Governance

Additional Information

AIRPORT

SERVICES

Manage, operate and maintain airports, and provide airport-related services to ensure that airports operate efficiently, safely and securely with high service levels

Total Revenue

RM 4,045.5million

Malaysia

RM 2,284.2 million

Profit Before Tax and Zakat

RM 510.8million

Overseas

RM1,761.3 million

Malaysia

RM 136.0 million

Group Passenger Traffic Movements

Overseas

RM 374.8 million

Malaysia	Türkiye
81.9 million	37.6 million
55.4% from 2022	20.5% from 2022

ANNUAL REPORT 2023

DUTY FREE AND NON-DUTIABLE GOODS

Operate duty-free outlets and provide management services for food and beverage outlets at designated airports

Total Revenue

RM 577.0million

Profit Before Tax and Zakat

RM 21.1million

Number of Retail Outlets	Number of Employees
		37		620
		40		631

Retail Area

12,352 sqm

13,033 sqm

2022 2023

Our Investment Ccase

Our Leadership Statement

PROJECT AND REPAIR MAINTENANCE

Offer consultancy, facility management services, maintenance of information, communication technology business ventures

and provision of mechanical and electrical engineering

Total Revenue

RM 154.7million

Malaysia		Overseas
RM 54.6 million		RM 100.1 million

Profit Before Tax and Zakat

RM 71.9million

Malaysia		Overseas
RM 61.6 million		RM 10.3 million

Number of Employees

788

829

2022 2023

Our Malaysia operations comprises five key business activities which are airport services, duty free and non-dutiablegoods, project and repair maintenance, hotel and agriculture and horticulture.

For overseas operations, in addition to ownership and management of Istanbul Sabiha Gökçen International Airport (IATA Code: SAW) in Istanbul, Türkiye, we also provide services for operations and maintenance of airports and airport-related services. Listed on the Main Market of Bursa Securities since November 1999, Malaysia Airports' market capitalisation stood at RM12.28 billion at the end of 2023.

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Our Value Creation Strategy

Our Performance

Our Governance

Additional Information

HOTEL

Manage and operate hotels

Total Revenue

RM 105.3million

Profit Before Tax and Zakat

RM 17.0million

Number of Hotels	Number of rooms
4	720

Breakdown of rooms

592

128
Malaysia	Türkiye

• Total Revenue and Profit Before Tax and Zakat is for hotels in Malaysia. Revenue for hotel in Turkiye is RM 23.6 million, which is reported under Airport Services.

AGRICULTURE AND HORTICULTURE

Cultivate and manage oil palm and other agricultural products, and undertake horticulture activities, primarily landscaping services and products

Total Revenue

RM 31.6million

Profit Before Tax and Zakat

RM 2.1million

Oil Palm Planted Area

6,247.1 ha

Fresh Fruit Bunches

36,724.5 MT

We are a constituent of the FTSE4Good Bursa Malaysia Index. As a signatory to the Aviation Industry Commitment to Action on Climate Change, we strive to create a pathway to carbon neutral growth and a carbon-free future. Malaysia Airports also holds memberships in the Airports Council International (ACI) and the ACI Asia Pacific Regional Environmental Committee.

Competitive advantage

• Malaysia is located in a strategic location - in the heart of ASEAN, surrounded by high growth markets such as China and India.
• Competitive aeronautical and passenger charges - one of the lowest in the world.
• Well-equippedairports with safety standards certified by global bodies such as ISO, British Standards Institution, and ACI.
• Our flagship, KUL, is ranked No.9 globally for >40 mppa in the 2022 ACI's Airport Service Quality rankings.
• KUL's two terminals have a combined capacity of 75 mppa.
• KUL's three independent runway system facilitates efficient flight operations.
• 100 km2 land bank surrounding KUL allows for aviation-related and commercial development.

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Our Investment Case

Our Leadership Statement

ANNUAL REPORT 2023

International Airports

MALAYSIA

• KL International Airport (KUL)
• Kota Kinabalu International Airport (BKI)
• Kuching International Airport (KCH)
• Langkawi International Airport (LGK)
• Penang International Airport (PEN)

WHERE WE OPERATE

TÜRKIYE

• Istanbul Sabiha Gökçen International Airport (SAW)

Domestic Airports

• Melaka Airport (MKZ)
• Sultan Abdul Aziz Shah Airport, Subang (SZB)
• Sultan Abdul Halim Airport, Alor Setar (AOR)
• Sultan Ahmad Shah Airport, Kuantan (KUA)
• Sultan Azlan Shah Airport, Ipoh (IPH)
• Sultan Ismail Petra Airport, Kota Bharu (KBR)
• Sultan Mahmud Airport, Kuala Terengganu (TGG)
• Bintulu Airport (BTU)
• Limbang Airport (LMN)
• Miri Airport (MYY)
• Mukah (MKM)
• Mulu Airport (MZV)
• Sibu Airport (SBW)
• Labuan Airport (LBU)
• Lahad Datu Airport (LDU)
• Sandakan Airport (SDK)
• Tawau Airport (TWU)

Short Take-Off and Landing

Ports (STOLPORTS)

• Pulau Pangkor (PKG)
• Pulau Redang (RDN)
• Pulau Tioman (TOD)
• Bakelalan (BKM)
• Bario (BBN)
• Belaga (BLG)
• Kapit (KPI)
• Lawas (LWY)
• Long Akah (LKH)
• Long Banga (LBP)
• Long Lellang (LGL)
• Long Semado (LSM)
• Long Seridan (ODN)
• Marudi (MUR)
• Kudat (KUD)
• Long Pasia (GSA)
• Semporna (SMM)

Duty Free and Non-Dutiable Goods

• KL International Airport (KUL)
• Kota Kinabalu International Airport (BKI)
• Kuching International Airport (KCH)
• Langkawi International Airport (LGK)
• Penang International Airport (PEN)

Alor Setar (AOR) 1.5 mppa

Langkawi (LGK) 4.0 mppa

Penang (PEN) 6.5 mppa

Subang (SZB) 1.5 mppa

KL International

Airport (KUL)

Terminal 1		Terminal 2
30.0 mppa		45.0 mppa

Pulau Pangkor (PKG)

Ipoh (IPH) 0.5 mppa

Kota Bharu (KBR) 1.5 mppa

Pulau Redang (RDN)

Kuala Terengganu (TGG)

1.5 mppa

Kuantan (KUA) 0.5 mppa

Melaka (MKZ) 0.5 mppa

Pulau Tioman (TOD)

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