Auckland Airport announces 12 months of strong performance

Auckland Airport announces 12 months of strong performance and solid returns

Auckland Airport has today announced its annual results for the financial year to 30 June 2013.

Total profit after tax was up 25.1% to $177.967 million, while underlying profit after taxation was up 10.6% to $153.781 million. The total dividends paid to shareholders for the year increases by 14.3% to 12 cents per share, including a final dividend of 6.25 cents per share, imputed at the company tax rate of 28%.

Revenue increased 5.1% to $448.458 million and operating EBITDAFI was up 3.6% to $330.843 million. Passenger movements for the financial year were up 3.6% to 14.516 million.

Chair, Joan Withers, says, “Auckland Airport has had another 12 months of strong performance which has provided solid returns to our investors in spite of continuing challenges in the market place.”

“We have continued to show leadership in the development of new routes and promoted greater understanding of new travel markets. Whilst we have seen some reductions in certain routes, our investment and work with our airline partners has resulted in a number of international and domestic airlines announcing new capacity and additional flights.”

“These successes have helped drive New Zealand’s travel, trade and tourism ambitions and we are committed to playing our part in delivering on those aspirations for New Zealand.”

“The Commerce Commission has now reported to the Government and stated that our pricing provides an acceptable return on the significant investment we are making in essential long-term infrastructure. This outcome has been the culmination of a very long and involved process and shows that New Zealand’s information disclosure regime for airports is working. We are pleased that we can now move forward with confidence in our future investment decisions.”

“With that eye to the future, the year has seen a successful transition to a new chief executive. Further, the strong and experienced leadership and governance provided by our Board will result in a successful transition in Board chairmanship later this year.”

Mrs Withers says that key revenue highlights include aeronautical revenue (airfield income, passenger service charges and aeronautical rental income) increasing 3.7%, in line with total passenger growth. The standout non-aeronautical revenue contributions came from property rental income ($41.099 million, up 12.5% from 2012) and car-park revenue ($40.370 million, up 10.2% from 2012).

Expenses increased 9.4% to $117.624 million. Key expenses contributing to this higher growth include 16.4% growth in staff costs primarily due to the significant increase in the accrual of long-term incentive provisions. This demonstrates strong alignment of staff incentives to the very strong company and share price performance over several financial years. New route development and continued marketing initiatives to drive passenger growth also contributed to 15.8% growth in marketing and promotional expenses in the year to 30 June 2013.

International passengers (excluding transits) grew 1.7% in the 12 months to June 2013 compared to the prior year. Following growth of 26.5% in the year, China has now surpassed the United Kingdom to be Auckland’s second-largest source of international passengers after Australia. Outstanding growth was also achieved in the domestic market with passenger growth to June 2013 of 8.4%.

Total share of profit from associates totalled $9.921 million, comprising North Queensland Airports’ $6.996 million, Queenstown Airport’s $1.319 million and Novotel Hotel’s $1.606 million.

The final dividend for the year of 6.25 cents per share, imputed at the company tax rate of 28%, will be paid on 17 October 2013 to shareholders who are on the register at the close of business on 3 October 2013.

“Auckland Airport is optimistic about the full 2014 financial year and expects underlying net profit after tax (excluding any fair value changes and other one-off items) to be between $160 million to $170 million. We note with some caution that there remains volatility in global economies and risk remains should this situation deteriorate. Therefore, as always, this guidance is subject to any other material adverse events, significant one-off expenses, non-cash fair value changes to property and further deterioration due to the global market conditions or other unforeseeable circumstances,” says Mrs Withers.

“While our business has continued to grow in the financial year to 30 June 2013, our strategic plan is to grow faster, aim higher and become stronger over the next 12 months and, in doing so, maintain the strong momentum we have established over the past few years. The company report released to the market today contains additional information on our new business strategy that will enable us to meet our high expectations for continued growth. The strategy will also enable us to deliver on our vision to be a great New Zealand business that is a world leader in creating value from modern airports,” says Mrs Withers.

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