Auckland Airport capital spending could reach $370 million this year as it speeds up work to keep up with surging demand.
The number of passengers through the airport rose more than 9 per cent to 17.3m in the year to June 30 and the company said that momentum has carried through to the current financial year.
The airport is the country's biggest listed company and it announced yesterday that net profit rose 17.4 per cent to $262.4m while underlying profit rose 20.6 per cent to $212.7m.
While passenger numbers had grown faster than forecast, chief executive Adrian Littlewood said the company hadn't been caught short but had to come up with some innovative solutions to accommodate them and brought some projects forward.
Work was being done on expanding Pier B, the international terminal level 1 and increasing the number of remote aircraft stands. A 30-year growth plan released about three years ago was providing a sense of direction.
"Had we not done that we would have been behind the eight ball. We're constantly updating that as the new demand profile emerges," Littlewood said. Rating agency Standard&Poors said the result had exceeded expectations.
"These stronger-than-expected results enable AIAL's capital structure to be well-placed to absorb the airport's planned increased investment, which is focused on its international terminal."
The agency said the $330m to $370m estimated capital spend was about $80m higher than its forecast.
"We don't consider this increase to be material, given the underspend compared with expectations in fiscal 2016 and its stronger earnings."
The airport said property capital expenditure was particularly strong and exceeded the original guidance by about $30m, or 40 per cent, during the past year. Revenue increased by 12.9 per cent to $573.9m with a near-20 per cent rise in retail earnings to $157m a key driver.
Specialty stores and food and beverage sales were standouts in the retail area.
Eight new international airlines launched or announced services during the last financial year and 15 new routes, and flight frequencies increased on existing routes.
"We haven't had a year like this for some time," Littlewood said.
There were no signs of that growth tapering off.
"While we've had phenomenal growth in the last year if you look at Sydney and Melbourne airport they've had that sort of growth in the last couple of years. That's a guide to us."
Airfield income was up 10.8 per cent to $103.4m. The passenger services charge increased 9.9 per cent to $154.9m. Parking was up $5.5 million to $52.1m, an increase of nearly 12 per cent. This reversed the 5.4 per cent fall in the previous financial year that arose from 1200 new spaces becoming available in that year.
The company said Auckland Council's new Unitary Plan provided for adjusted noise contours to help development of a second runway, improved land designations and preserved airport development flexibility within its precinct.
The company expects underlying net profit after tax (excluding any fair value changes and other one-off items) for the 2017 financial year to be between $230m and $240m.
The company's shares closed up 10c at $7.30 yesterday.