MAP Airports (MAP, $2.86) Buy

By Jason Fittler

Infrastructure stocks have yet to run, MAP is a key pick in this sector.

They are today showing good results in a tough climate.

The Brussels Airport's declined 1.6% for third quarter 2009 as April's price increase and cost-control measures combined to see earnings outperform traffic declines. With economic conditions improving, we see upside in MAP's share price.

This is a good result given that the second quarter showed a decline of 6.6% and year to date earnings have fallen 9.1% on the pcp. It was driven by moderating traffic declines, a 5.1% increase in aeronautical tariffs in April 2009, improved property revenues and tight operating cost control.

Quarter on quarter revenue declines continue to be better than the recovery in traffic volumes, which highlights the effectiveness of MAP’s responses to the economic downturn.

Traffic declines continue at MAP’s European Airports and the combined impact of price increases, commercial initiatives and tight operating cost control has had limited earnings declines to date.

MAP has strong management, in our view, is highly leveraged to economic recovery, has cA$900m of surplus cash on a balance sheet to provide financial flexibility and is yielding a best-in-sector at 7.3%.

MAP remains our top pick in the sector, with potential upside to our valuation from better-than-expected economic conditions. 

If you would like more information on MAP Airports please call us on 07 4771 4577.