Positive Outlook For Airport Sharholders
Emerging tourism markets such as India and China, demand for new airline services and positive growth in passenger
numbers meant a positive outlook for shareholders, retiring Auckland Airport chairman Wayne Boyd told today’s annual
meeting.
"The company is focused on establishing a platform for long-term sustainable growth. We have completed a number of major
expansion and security projects on time and within budget. Several more major projects have been commenced and are under
way,” Mr Boyd said.
“We are also very focused on growing our commercial revenue streams. There is an improving trend in retail trading and
we have committed to a number of new property developments.”
Despite a marginal fall in passenger and aircraft volumes in the three months to September, revenue for the period was
$77.1 million, up 8.3 per cent on the corresponding period last year, and EBITDA was $60.8 million – an increase of 8.0
per cent. Principally as a result of the lower passenger volumes combined with higher depreciation from the company’s
investment programme and higher interest costs (including additional interest costs associated with the financing of the
special dividend of 12 cents per share paid in August last year), surplus after tax for the three months to September
2006 was $24.2 million, compared with $24.9 million for the previous year.
International passenger movements (excluding transits and transfers) in the first three months were down 1.1 per cent to
1,497,212, due in part to a slowing growth rate of New Zealand travellers and also last year’s higher number of
travellers generated by the Lions’ rugby tour.
Domestic passenger movements in the first three months were also down by 1.4 per cent to 1,217,849 with the overall
passenger numbers down 1.5 per cent to 2,779,595. Total aircraft movements were down 0.7 per cent for the three month
period.
However, during September 2006, there was a 3.1 per cent rise in international passenger movements (excluding transits
and transfers) and international aircraft movements were up 2.4 per cent compared with the same month in 2005.
Importantly, international passenger arrivals were up 4.3 per cent over the same month last year. Mr Boyd anticipated
further growth in international arrivals during the rest of the year and particularly during the high summer season.
Mr Boyd said that, while the passenger growth rate over the next 12 months was expected to remain positive, it was
likely to be below the company’s long-term growth rate of around 5 per cent.
Affecting people’s travel plans in recent times had been increases in fuel prices and airfares, although these were now
showing a decrease, and the slowing of the New Zealand economy.
“New services from Auckland Airport are expected to stimulate demand and we are seeing compelling signs of growth from
new markets such as India and China.”
Capital expenditure (excluding property developments) for the 2007 and 2008 financial years was anticipated to be around
$105 million and $135 million respectively. With most of the key projects scheduled for completion in the 2008 financial
year, Mr Boyd said that capital expenditure was expected to reduce significantly in 2009.
“At that stage, Auckland Airport’s processing capacity and services will have been significantly enhanced, providing the
necessary capacity for at least the next three to five years,” Mr Boyd added.
He said that the high interest rate environment and depreciation costs associated with the company’s investment
programme meant directors expected the surplus after-tax result in 2007 to be similar to the 2006 result.
Mr Boyd said that the stage was set for much improved earnings, particularly when passenger growth figures reverted to
the long-term trend.
“The company is strongly positioned to complete this current phase of our investment programme and to continue to
deliver long-term value to our shareholders.”
Ends