AOT - 4QFY24: In line with estimates

4QFY24: In line with estimates. AOT reported a 4QFY24 (July–September 2024) net profit of Bt4.3bn (+24% YoY but -6% QoQ); excluding extra items (FX and impairment losses) uncovers a core profit of Bt4.4bn (+20% YoY but -5% QoQ), in line with INVX and market estimates. Behind the YoY growth was a rise in international passengers to 18.1mn in 4QFY24 (+20% YoY and 2% QoQ, 87% of pre-COVID-19 level). The QoQ slip reflects lower concession revenue after reclaiming commercial area to improve passenger services (July), closing duty-free shops for arriving passengers (August) and the latest announcement of a refund of previously received minimum guarantee to a concessionaire due to the reclamation of commercial area. In FY2024, AOT reported core profit of Bt19.5bn, surging 111% YoY. It announced a dividend of Bt0.79/share on FY2024 operations, 1% dividend yield, with XD on Dec 4, 2024 and payment on Feb 6, 2025.

Limited impact on earnings from the recent reclamation of commercial area. On Jul 30, 2021, AOT requested the return of some commercial area for retail shops from concessionaire King Power to facilitate construction of the East Terminal expansion at Suvarnabhumi Airport. It was initially agreed that AOT would provide an alternative area of equivalent size. However, due to insufficient space, AOT was unable to allocate the required area. Therefore, on Nov 21, 2024, it has thus officially reclaimed the area and refunded the minimum guarantee previously paid by the concessionaire; we expect this amounted to ~Bt337mn through Sep 2024. The reclamation of commercial area will come with a 5% reduction in minimum guarantee per passenger for the retail concessions at Suvarnabhumi Airport and we thus revise core earnings down by ~1% from FY2025 onward, implying limited impact on earnings.

FY2025 earnings to grow 18% YoY. We forecast FY2025 core earnings at Bt23bn or 18% growth, assuming international passengers grow 16% to 84mn in FY2025 from 72.7mn in FY2024 to reach 100% of pre-COVID-19 level. In 1QFY25 (Oct –Dec 2024), which is Thailand’s high season, we expect core earnings to grow YoY and QoQ; international passengers in Oct reached 100% of pre-COVID and in Nov 1-16 were at 105% of pre-COVID-19 level. We maintain our Outperform rating and roll our valuation to 2025, giving an end-2025 DCF TP of Bt72/share (from end-2024 DCF TP of Bt70/share), based on WACC at 7.5% and LT growth at 2%.

Risks. Global economic slowdowns that will cut travel demand. We see ESG risks as environmental issues (E) and social issues such as safety (S).