AOT Aims to book ฿23bn in 2021 from Airport Concession, Adding ฿13 to Share Price!

AOT is aiming to book ฿23 billion from airport concession, acquired by King Power which would add ฿13.0/Share to AOT’s share price!

Airports of Thailand Public Company Limited (AOT) has announced that on Wednesday, June 19, 2019, its Board of Directors has resolved to approve the bidding results for 3 concessions as follows:

 

1) A concession for duty-free shops at Suvarnabhumi Airport

King Power Duty Free Co., Ltd. (KPD) won the bidding to operate duty-free shops at Suvarnabhumi Airport from 28 September 2020 to 31 March 2031, whereby AOT will collect a monthly return at the rate of 20% of revenue of any given month before deduction of any expenses (excluding VAT) or the first year’s minimum guarantee of THB 15,419,000,000 (excluding VAT) as offered by KPD. AOT will make adjustments to increase the minimum guarantee in the following years by using the formula MAG(i) (based on passenger growth rate and inflation rate of a previous calendar year).

 

2) A concession for duty-free shops at Phuket International Airport, Chiang Mai International Airport and Hat Yai International Airport

King Power Duty Free Co., Ltd. (KPD) won the bidding to operate duty-free shops at Phuket International Airport, Chiang Mai International Airport and Hat Yai International Airport from 28 September 2020 to 31 March 2031, whereby AOT will collect a monthly return at the rate of 20% of revenue of any given month before deduction of any expenses (excluding VAT) or the first year’s minimum guarantee of THB 2,331,000,000 (excluding VAT) as offered by KPD. AOT will make adjustments to increase the minimum guarantee in the following years by using the formula MAG(i) (based on passenger growth rate and inflation rate of a previous calendar year).

 

3) A concession for commercial areas in the Passenger Terminal at Suvarnabhumi Airport

King Power Suvarnabhumi Co., Ltd. (KPS) won the bidding to manage commercial areas in the Passenger Terminal at Suvarnabhumi Airport from 28 September 2020 to 31 March 2031, whereby AOT will collect a monthly return at the rate of 15% of revenue of any given month before deduction of any expenses (excluding VAT) or the first year’s minimum guarantee of THB 5,798,000,000 (excluding VAT) as offered by KPS. AOT will make adjustments to increase the minimum guarantee in the following years by using the formula MAG(i) (based on passenger growth rate and inflation rate of a previous calendar year).

In total, AOT would receive over THB 23,000 million from the minimum guarantee, which is higher than what analysts had anticipated at an approximately of THB 11,000-15,000 million. According to analysts, the revenue from King Power would reflect to an upside of AOT’s share around ฿10.0-13.0/share.

 

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