Airport Continues Solid Growth

Airport Continues Solid Growth

Auckland International Airport Limited (AIAL) continued to deliver solid growth in revenue and earnings before interest, tax and depreciation (EDITDA) in the first half of the 2007 financial year.   Good progress was also made on upgrading and expanding the airport facilities to meet growing demand and higher service standards.

Total revenue for the six months ended 31 December 2006 increased 7.0 per cent to $159.679 million.  EBITDA increased 7.8 per cent to $126.221 million.  Surplus after tax was up 0.1 per cent to $51.113 million. 

AIAL chairman, John Maasland, said “This is a pleasing result.  The company delivered increases across all of its major revenue lines.  Surplus after tax was also marginally above last year’s result.  This was despite the expected increase in depreciation and interest costs directly associated with the company’s investment programme, combined with higher interest rates”. 

Accelerating growth in international visitor arrivals, particularly in the last four months of the first half, underpinned a 1.4 per cent increase in total passenger movements to 3,659,996.  International passenger movements (excluding transits and transfers) increased 0.8 per cent to 3,166,226.   There was solid growth in arrivals from some of the more traditional markets, such as Australia, the United Kingdom and the United States of America, supported by very strong growth from newer markets such as China and India.  Domestic passenger movements increased 1.9 per cent to 2,538,021.

Aeronautical revenues increased following the completion of several significant terminal expansion and security projects last year.  The company’s retail activities also performed very well.  Retail income was up 8.3 per cent.  This resulted from the opening of new duty-free stores in September 2005 combined with higher passenger spend rates.  The company also made good progress expanding its investment property portfolio.  A number of new developments were completed during the period.

Don Huse, chief executive, said “The company is now in the third year of a four year increased investment programme.  Last year, the company completed the new upper level on the international terminal pier ($47 million), the new hold stow baggage screening facilities ($28 million) and the final stage of the main runway rehabilitation and widening ($37 million over four years).  This year, AIAL is making progress on the next stage of major terminal upgrades.  These include the expanded arrivals project ($100 million), the upgrading of the domestic terminal precinct ($42 million, including a $13 million contribution from Air New Zealand) and the first stage of the new Pier B at the international terminal ($50 million).  Engineering work has also commenced on the first stage of the northern runway, and this is expected to be operational in late 2010 or 2011.”

Mr Maasland said, “The directors are positive about the long-term growth prospects for the business.  We are beginning to see early signs of increased passenger growth rates, particularly visitor arrivals to New Zealand.  The company’s major airline customers are undertaking significant aircraft upgrades.  This will deliver cost efficiencies, service improvements and higher seat capacity.  This in turn will stimulate demand.  New services and schedules are being pursued.  The impact of higher fuel prices on airfares is beginning to moderate.  Over the medium term, New Zealand will host a number of major world events, such as the Rugby World Cup in 2011, which will further promote inbound tourism growth.

In the short term, the current passenger volumes, together with the impact of the current investment programme on depreciation and interest costs, will influence the financial results for the current period.  Reflecting these circumstances, the directors remain of the view that the surplus after-tax result for the full year will be similar to the previous year.  However, the company has made strong progress towards completing the current investment programme.  This sets the stage for much improved earnings growth from the end of the next financial year”.

The directors have announced a fully imputed dividend of 3.75 cents per share, consistent with last year’s interim dividend.  The interim dividend has a record date of 16 March 2007 and will be paid out to shareholders on 30 March 2007.

ends

Fast Facts:

    Six months to 31 Dec 06         Six months to 31 Dec 05

Revenue                                          $159.7 m                        $149.3 m

EBITDA                                                   $126.2 m                        $117.1 m

Surplus after Tax                                                  $51.1 m                         $51.0 m

Dividend (cents per share)                                               3.75                            3.75

Total aircraft movements                                             79,102                          81,047

        International                                        19,588                          19,551

        Domestic                                             59,514                          61,496

Total passenger movements                               6,198,017                       6,100,306

International                                   3,166,226                       3,141,270

Transit and transfer                               493,770                         468,444

Total International                             3,659,996                       3,609,714

        Total Domestic                                  2,538,021                       2,490,592      

Ends

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