Airport shares hit record

By DANIEL RIORDAN

Auckland International Airport (AIA) shares reached a record high after the company released another strong profit result and signalled improving traveller numbers as the impact of September 11 lessens.

The news is sure to please Auckland City Council, which on Wednesday started the sale process for its 25.7 per cent stake in the company - worth $440 million at yesterday's closing price. Airport shares, which soared 15c yesterday to $4.07, were issued in July 1998 at $2.02.

Managing director John Goulter said international passenger numbers had dipped below the previous year's level from mid-October to early December, but had picked up. January and February numbers were up nearly 3 per cent, with the airport handling more international passengers in one week (to January 13) than before. Domestic numbers are about 5 per cent higher.

"The visitor industry is alive and well, and I can't see any reason why it won't continue to be alive and well," Mr Goulter said.

AIA's net profit of $35.105 million for the six months to December 31 was 23 per cent higher.

Total passenger numbers were up 4 per cent over the six months, with international numbers up 2.8 per cent and domestic numbers up 5.8 per cent.

Slightly fewer aircraft used the airport, reflecting Air New Zealand's international route reductions, the temporary suspension of flights between Auckland and North America and the demise of Qantas NZ. But airfield income was 6.7 per cent higher thanks to higher landing charges and the greater overall tonnage of planes, the basis for the charges.

Retail income, the airport's biggest revenue earner, was 3.8 per cent higher. Income from the nine new retail outlets in the newly expanded international terminal contributed little to the increase, because they opened only in late November and December.

Overall revenue was 7.2 per cent higher at $99.7 million. Operating expenses rose 1.2 per cent to $24.8 million.

Mr Goulter said profit before tax for the current six months (to June 30) should be similar to the interim's $50.2 million.

A tax adjustment boosted the reported net profit by $1.45 million. Otherwise, net profit would have been 18 per cent higher rather than the 23 per cent reported.

Analysts gave the result a big thumbs up. CS First Boston research head Rob Bode said the market was responding to news of higher international passenger numbers over the past two months.

The company will pay an interim dividend of 6c per share on March 28, up from 5cps.

The company expects to make an announcement on a hotel development early this month, and on Queen's Birthday weekend it will open a free jukebox museum, which it hopes will attract more visitors.

Auckland City Council has asked professional advisers to tender to advise on the sale of its shares by March 13 and will make a choice by March 26. A study on the sale, indicating when would be the best time to sell and how to make the sale, will be completed by April 26.

Council finance director David Rankin said no sale would take place until the council completed its annual plan at the end of June, and public submissions on the sale would have to follow that.

The last significant shareholder to sell was Changi Airport Enterprises. Changi sold its 7.1 per cent stake to institutions in December at $3.58 a share compared with a market price of $3.80.