Auckland Airport announces interim results for half-year ending 31 December 2011
• Reported profit and underlying profit both up
• On track for higher end of full year guidance
• Good passenger growth at all four airports
• Dividend increased to 4.40 cents per share
• Growing need to address constraints at Auckland domestic terminal facilities
Overview
Auckland Airport today announced a reported profit after tax of $69.103 million for the six month period ended 31
December 2011, up 5.5% on the same period last year. Underlying profit after tax was up 15.0% to $70.791 million.
“Initiatives to lift Auckland Airport’s performance contributed to another strong result in the six-months,” said
Auckland Airport’s Chair, Joan Withers. “Our efforts have been rewarding for investors. The interim dividend has
increased to 4.40 cents per share, underlining the Board’s confidence in the execution of strategy. The last two
financial years have seen total shareholder returns per annum in excess of 20%, and we are on track for another solid
performance this year. These results reflect our efforts to deliver excellent value to shareholders, passengers,
business partners and New Zealand.
“We have seen rising travel demand across all four of our airport interests, and we have helped to stimulate that demand
by encouraging sustainable growth in air-service capacity. Recognising the changing architecture of global travel and
trade, we have continued to focus our market development efforts on expanding sustainable access to those markets that
are experiencing faster growth.”
Auckland Airport’s chief executive, Simon Moutter, said, “We have also further honed the performance of our
aeronautical, retail and property businesses, by expanding choices and amenities for customers, improving the service
experience, and driving operational efficiencies wherever we can. Each part of our business is performing well relative
to their peers and to market conditions.”
Domestic terminal
Mr Moutter also said that considerable effort has also gone into necessary future planning. “As previously indicated, we
are experiencing capacity constraints and sub-optimal performance at the current domestic terminal. The heart of the
domestic terminal was built over 40 years ago. Today, it is becoming increasingly inadequate in terms of available space
and passenger handling capacity, especially with the increasing use on domestic routes of new, larger aircraft such as
the A320.”
While an expansion of the security screening area at the domestic terminal in time for RWC 2011 relieved some pressure,
more A320 services are due to be progressively introduced over the next few years and passenger numbers are expected to
grow.
“All the parties involved recognise the need to address this situation before it becomes a major issue,” said Mr
Moutter. “Over recent months, we have been consulting actively and constructively towards the best pathway for a new
domestic terminal solution with our airline partners and with input from independent experts. That process is continuing
and we expect to see an outcome in the next few months,” said Mr Moutter.
Passenger Numbers
Total international passenger movements at Auckland Airport, including transits, increased 6.5% to 3.964 million in the
six months to 31 December 2011. Total domestic passenger volume growth was more muted, up 0.9% to 3.130 million. The
six-month period saw particularly strong growth out of Singapore, China, Australia and, reflecting the RWC 2011
influence, the major rugby playing nations of Europe in September and October. New Zealand outbound travel also
increased.
Queenstown Airport had another big international passenger volume increase of 30.1% to 118,840. Its domestic volumes
also reflected increases in air-link capacity, growing 3.9% to 399,070.
Cairns Airport experienced good international passenger growth, up 6.7% to 423,735, while its domestic operations
reflected the flat Australian domestic tourism market, largely driven by the strong Australian dollar which is
motivating outbound international travel, steady at 1.731 million. Mackay Airport bucked the sluggish Australian
domestic travel trend, with the booming resources sector continuing to fuel strong domestic growth, up 6.3% to 570,497.
Results in more detail
The half-year financial results reflect consistent execution of growth strategy across all parts of the business.
Revenue was $215.867 million, up 8.9% on the previous corresponding six month period. In particular, there was a strong
performance from the retail and car-parking businesses. There were also pleasing income increases in both the
aeronautical and property businesses, with aeronautical up 6.0% and the property division’s income up 10.0% on the
previous period.
The dividend has been increased to 4.40 cents per share. The Company’s dividend reinvestment plan will not apply to this
dividend, but will be reconsidered by the Board for future dividends.
While there remains a focus on tight management of costs, expenses were up 15.3% to $54.506 million. This was largely
the result of expenditure on operational support and maintenance ahead of the RWC 2011, phasing of investment in
air-service route development, which will ameliorate in the second half of the year, and an increase in
master-planning activities. Depreciation expenses were $31.751 million, up 10.5% on the previous corresponding period.
Earnings before interest, taxation, depreciation, fair-value adjustments and investments in associates (EBITDAFI), were
up 6.9% to $161.361 million. Earnings per share on underlying profit was 5.3 cents per share for the six months ended 31
December 2011, compared with 4.7 cents per share from the corresponding period for the six months ended 31 December
2010.
Share of profit of associates (comprising North Queensland Airports, Queenstown Airport and Auckland Airport Hotel
Holdings Limited), was $2.713 million up 219.9% on the corresponding period, reflecting a significant increase in return
from North Queensland Airports, and the commencement of returns from the Novotel Auckland Airport hotel.
North Queensland Airports had an excellent six months, with our shareholding return in cash received relating to the
period up 27% to AUD4.836 million. This was underpinned by revenue growth of 7.4% to AUD 57.320 million, with EBITDAFI
up 16.2% to AUD 37.513 million.
Queenstown Airport reported a small decline in profit, down 5.1% on the prior corresponding period to $2.817 million.
While revenue growth was solid, up 9.9% to $8.478 million, and EBITDAFI was also up 4.9% to $6.154 million, there was an
increase in costs arising from higher aeronautical costs from longer terminal opening hours, increased marketing support
to airlines and one-off snow clearing expenses following two winter 2011 storms.
The RWC 2011 was a major operational success at Auckland Airport. Alongside all our airport partners, we delivered a
successful, safe and smooth airport experience for many thousands of travellers, fans, players and officials.
Financially, we believe that the tournament delivered an additional non-seasonal peak to the business in terms of
passenger volumes and retail spend, which we estimate to have delivered a modest one-off boost to the bottom line.
Looking ahead
The second half of the 2012 financial year has started well, particularly in terms of passenger volumes, with January
2012 notable for featuring the busiest week for international arrivals and departures ever recorded at Auckland Airport.
At the beginning of the 2012 financial year, we outlined our expectations that the net profit after tax (excluding any
fair value changes and other one-off items) would be in the $130 millions. We are firmly on track to meet the higher end
of this guidance, subject to any material adverse events, significant one-off expenses, non-cash fair value changes to
property, and further volatility in global market conditions or other unforeseeable circumstances.
Ends
Refer pdf attachments: Financial Report / Results at a Glance / Company Report / NZX Appendix