KLAS will contribute to DRB's future growth

DRB-HICOM Bhd's (DRB)future growth is expected to come from Kuala Lumpur Airport Services (KLAS), which is a wholly-owned subsidiary of HICOM Holdings and in turn DRB, says HwangDBS Vickers Research.

KLAS' main scope of business includes ground handling, integrated logistics services (ILS), cargo handling, facilities and equipment maintenance, in-flight catering, aircraft maintenance and engineering.

"While the contribution to DRB's group revenue and pre-tax profit is not significant at two per cent for financial year 2012, we came away feeling there was vast potential for this business.

"This is especially with the impending opening of KLIA2, synergies with DRB (largely for Proton and Pos Malaysia) and also potential new airlines," the research house said in a research note today.

It said for 2012, KLAS made RM171 million in revenue and RM22 million in pre-tax profit. This is in contrast to the revenue and pretax profit of RM148 million and RM21 million respectively for 2011.

KLAS is present in six airports in Malaysia, namely Langkawi, Penang, Subang,Kota Kinabalu, Kuching and the Kuala Lumpur International Airport (KLIA). It currently has 46 customers, and handled 23,199 flights and 1.8 million meals in 2011.

HwangDBS has maintained a "buy" call on DRB with a target price of RM3.60.