Strong year-end result for Queenstown Airport

Trans-Tasman growth drives strong year-end result for Queenstown Airport

- Strong financial performance, Net Profit After Tax $6.6 million - up 25% from the previous year ($5.3 million)

- Stellar 27.6% growth in trans-Tasman passenger numbers year-on-year

- $4.3 million dividend delivered to its two shareholders Queenstown Lakes District Council (QLDC) and Auckland Airport, up from $3.6 million last year. For QLDC, this equates to around $143 per rateable property.

Queenstown Airport Corporation (QAC) continues to build on the success of recent years, reporting another strong financial performance for the year ended 30 June 2014.

Driven by continued growth in passenger numbers, particularly from Australia, improved commercial revenues and prudent management of operating expenses, QAC earned a Net Profit After Tax of $6.6 million for the year - up 25% from the previous year’s profit of $5.3 million.

Total revenue grew 12% from $19.6 million last year to $21.9 million and the uplift flowed to Operating Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) which increased by $2.3 million, or 18%, to $15.2 million.

“Increased passenger numbers have once again underpinned the company’s strong financial performance,” Queenstown Airport Corporation Board Chairman John Gilks said.

A key contributor to the company’s performance was stellar month-on-month trans-Tasman passenger growth which jumped 27.6% from 241,714 to 308,402 passengers in a year.

Overall, Queenstown Airport experienced its busiest year on record with a 4.2% increase in total passenger movements compared to the previous 12 months - itself a record.

Almost 1.25 million (1,248,878) passengers travelled through the airport, 75% (940,476) of which were domestic passengers and 25% (308,402) international passengers.

In line with financial results, QAC’s Board of Directors is pleased to confirm a total dividend of $4.3 million for the year, with 75.1% payable to Queenstown Lakes District Council and 24.9% to Auckland International Airport Limited. For QLDC, the dividend payment equates to around $143 per rateable property (up $21 on last year).

The total dividend comprises a fully imputed interim dividend of 6.23 cents a share ($1.0 million) which was paid on 31 January 2014, and the balance, a fully imputed final dividend of 20.65 cents a share ($3.3 million), which will be paid today (20 August).

Mr Gilks said the appeal of Queenstown and the surrounding region as a domestic and international travel destination remains strong.

“QAC will continue to work closely with aviation and tourism partners to build sustainable capacity growth and improve connectivity, particularly with the possibility of evening flights commencing in 2016.

“Airline alliances, such as those between Air New Zealand and Virgin Australia, and Qantas Group and Emirates, have been instrumental in opening us up to international flying networks, giving short- and long-haul travellers better access and more flexibility to visit our region,” he said.

“Forward schedules show a strong desire from all four airlines operating at Queenstown Airport – Air New Zealand, Jetstar, Qantas, and Virgin Australia – to continue to meet rising demand from our key market of Australia. We are very grateful for their on-going support and are working hard to ensure we have the appropriate infrastructure in place to meet this growth and maintain service levels.”

To manage the demands of growth and improve passenger flow, QAC completed several key infrastructure projects during the year. These included improving passenger flows in the arrivals/departures areas, acquiring a third baggage reclaim belt, resurfacing car parks, building a new Aviation Security office, moving its corporate office to make way for a second passenger lounge, and leasing space for a mini corporate jet terminal which opened in May.

Work also continued on two long-term projects: QAC’s 20-year noise mitigation works plan, which will commence in the next financial year, and acquisition of land to the south of the runway referred to as ‘Lot 6’.

On the commercial front, passenger growth allowed for increased rents and improved fitouts with existing tenants while the positive outlook for the airport attracted new retail and food and beverage offerings. The Remarkable Sweet Shop (opened June 2013), Kapa (December 2013), Patagonia Café (March 2014) and Airspresso (July 2014), have proven popular with airport visitors and are expected to lift next year’s commercial performance.

The strategic alliance with shareholder Auckland Airport continued to deliver benefits, said Mr Gilks.

“This has been reflected in our passenger growth and helped us reduce costs and improve efficiencies in managing future capital investment and property development.

“Having the ability to tap into the country’s number one travel gateway has been extremely beneficial for us from a route development and tourism promotion perspective as well as being able to share operational learnings.”

To view Queenstown Airport Corporation’s full 2013-2014 Annual Report or the Annual Review, which is a summary of the report, please visit www.queenstownairport.co.nz/about/reports (Results and Reports).

ENDS

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