SENAI Airport Terminal Services Sdn Bhd (SATS), the operator of Senai International Airport in Johor, expects to be profitable this year, seven years after securing the concession in 2003.

Deputy chief executive officer Shahrull Allam Shah Abdul Halim said the Senai free zone, the aviation park and the soon-to-be-opened Aeromall will be the main drivers of growth for the firm.

"We are positive on the outlook for this year. We will have a positive earnings before interest, taxes, depreciation, and amortisation for the fiscal year ending December 31 2010," he told Business Times in an interview.

While the firm is operationally profitable, it has been in the red due to interest payments on loans it took to buy 1,120ha of plantation land next to the airport. The land is to be developed into a RM4 billion high technology park, with a loan repayment period of over 10 years.

Shahrull said SATS broke even last year on RM60 million revenue, attributing it to its turnaround measures.

The firm's revenue is mainly contributed by its aeronautical business and the rest from non-aeronautical activities such as retail and land development.

However, it expects the composition of revenue to change in the future.

Meanwhile, construction and infrastructure developments on the high-tech park will begin next month.

SATS also has 4ha of land fronting Senai Airport where it will build a 200-room hotel, apartments, offices and retail lots, worth more than RM200 million.

Next to this, SATS has a 8ha site to be developed as an international trade centre, together with the Wenzhou Association of China, with an investment of RM200 million.

The development of the Aeromall on a 20ha site, annexed to Senai Airport, is 65 per cent completed and targeted to open in the third quarter of 2010.

Shahrull said he expects the development to finish by end-June, which is six months behind target.

Aeromall is an extension to the existing terminal. The single-storey triangular structure with a central concourse area will be flanked by thematically designed retail and food outlets covering total retail space of 83,375 sq ft.

"We will try to attract a variety of tenants for the mall. For now, 60 per cent of the retail floor area has been leased. We have firm interests from various retailers and branded outlets," Shahrull added.

Source: Business Times