KEY POINTS:
Auckland International Airport's (AIA) after-tax profit for the year to June fell 2.4 per cent to $103.2 million.
Announcing the result today, the company said the fall in profit was due to additional interest and depreciation costs from the expansion and upgrading of airport facilities, along with the
interest costs associated with recent capital restructuring.
Adjusted for the additional interest costs associated with the capital restructuring and asset sales, the surplus after-tax result was up 3.2 per cent.
Revenue was up 8.2 per cent over the previous year to $305.8 million, while earnings before interest, taxation and depreciation (ebitda) increased 8.4 per cent to $240.2 million.
AIA chairman Wayne Boyd said results for the year under way were expected to be similar to those reported today.
Passenger growth rates were likely to remain subdued throughout the 2007 financial year, Mr Boyd said.
Recently foiled terrorist plots in the Northern Hemisphere and resulting heightened security measures may also have a short-term impact on demand and financial performance.
"Taking these issues into account, combined with the current state of the New Zealand economy, the high interest rate environment and depreciation costs associated with the company's investment programme, the surplus after-tax result for the 2007 year is expected to be similar to the 2006 result.
"That said, the stage is set for much improved earnings, particularly when passenger growth rates revert to the long-term trend," he said.
Total passenger numbers for the year to June were up 1.8 per cent to 11.46 million, AIA said.
International passenger movements, including transits and transfers, were up 1.1 per cent to 6.5 million and domestic movements were up 2.8 per cent to 4.96 million.
Excluding transits and transfers, international passenger movements were up 1.3 per cent.
A fully imputed final dividend of 4.45 cents per share, amounting to $54.3 million, is to be paid, following on from an interim dividend of 3.75cps, taking total ordinary dividends this year to 8.2cps, consistent with the previous financial year.
The company also today announced its intention to go ahead with building the estimated $50m Pier B at the international terminal, subject to final agreement on pricing.
The new pier, to be finished in mid-2008, will provide additional contact gates, reduce busing operations, and accommodate the boarding of larger aircraft, such as the Airbus A380.
Airport chief executive Don Huse said t he commercial environment had been more challenging than last year.
Issues included a slowing in the rate of passenger growth, disruption to the company's retail operations from construction activity, higher depreciation and higher interest rates, he said.
Recent declines in the value of the New Zealand dollar could be expected to stimulate international arrival volumes, and compelling signs were being seen of growth from newer markets such as China and India.
Oil prices were a concern, with all AIA's major airline customers upgrading their fleets with more fuel efficient and larger aircraft, Mr Huse said.
The current aeronautical investment and expansion phase would be completed in the next 18 to 24 months.
After that the airport would have the capacity to accommodate expected growth for the next three to five years or more without further significant aeronautical investment, leading to "significantly enhanced returns", he said.
AIA aimed to reach a negotiated outcome with its airlines customers over new charging proposals to apply for five years from September 2007.
Independent valuations during the year of AIA's property, plant and equipment and investment properties resulted in the company's non-current assets inc reasing $1.4 billion.
That included $709 m of terminal retail assets which had not been previously incorporated in AIA's financial statements on a discounted cash flow basis.
The market value of AIAL's investment property portfolio increased $16.8 m from $172.8m to $189.6m. Excluding capital expenditure on new and existing properties, the value of the portfolio increased by $13.6 m.
AIA shares closed yesterday at $1.92, having ranged between $1.79 and $2.34 in the past year.
- NZPA
