Auckland Airport says net profit and passengers down

Auckland International Airport today reported a lower net profit in the September quarter, with aircraft and passenger numbers down on a year ago.

Net profit after tax for the three months to September fell to $24.2 million from $24.9m for the year ago period.

This was mainly due to lower passenger volumes combined with higher depreciation from the company's investment programme and higher interest costs (including additional interest costs associated with the financing of the special dividend of 12 cents per share paid in August last year).

Despite a marginal fall in passenger and aircraft volumes in the September quarter, revenue for the period was up 8.3 per cent to $77.1m on the corresponding period last year.

Ebitda (earnings before interest, tax, depreciation and amortisation) was up 8 per cent to $60.8m.

Despite telling shareholders at the annual meeting in Auckland today that passenger number growth was likely to below the long-term average, the company was upbeat.

Retiring chairman Wayne Boyd said business from emerging markets meant a positive outlook for the company.

"Markets such as India and China, demand for new airline services and positive growth in passenger numbers meant a positive outlook for shareholders," he said.

Mr Boyd said a high interest rate environment and depreciation costs associated with the company's investment programme meant it expected the after-tax profit in 2007 to be similar to the $103m net profit in 2006.

But the stage was set for much improved earnings, particularly when passenger growth figures reverted to the long-term average, he said.

AIA shares were up 3c to $2.04 shortly after the news.

Mr Boyd said the company had completed a number of major expansion and security projects on time and within budget.

There was an improving trend in retail trading and the company had committed to a number of new property developments.

International passenger movements (excluding transits and transfers) were down 1.1 per cent to 1,497,212, due in part to a slowing growth rate of New Zealand travellers and also last year's higher number of travellers generated by the British Lions' rugby tour.

Domestic passenger movements were also down by 1.4 per cent to 1,217,849 with the overall passenger numbers down 1.5 per cent to 2,779,595.

Total aircraft movements were down 0.7 per cent for the three month period.

During September 2006, there was a 3.1 per cent rise in international passenger movements (excluding transits and transfers) and international aircraft movements were up 2.4 per cent compared with the same month in 2005.

Importantly, international passenger arrivals were up 4.3 per cent over the same month last year, Mr Boyd said.

He anticipated further growth in international arrivals during the rest of the year and particularly during the high summer season.

The economic slowdown, higher fuel prices and airfares had affected people's travel plans in recent times, although these were now showing a decrease, he said.

"New services from Auckland Airport are expected to stimulate demand and we are seeing compelling signs of growth from new markets such as India and China."

With most of the key projects scheduled for completion in the 2008 financial year, Mr Boyd said that capital expenditure was expected to reduce significantly in 2009.

Capital expenditure (excluding property) for the 2007 and 2008 financial years was anticipated to be around $105 million and $135 million respectively.

- NZPA