Auckland International Airport half year results:
Revenue - $184m up 6.8pc
Profit - $9.8m down 79.4pc
Dividend - 3.75 cents per share
KEY POINTS:
A slumping property market has hit profits at Auckland International Airport, with half year profits down nearly 80 per cent to under $10 million.
If its $41.8 million investment property devaluation is taken out, after tax profits for the half year would have been up 8.3 per
cent to $51.6 million.
International passenger movements were down 1.2 per cent, while domestic travel numbers rose 4.1 per cent.
A dividend of 3.75 cents per share is paying paid out to airport shareholders, which is a fall of 2 cents a share from the same time last year.
Revenues were up 6.8 per cent, while operating earnings were up 2.5 per cent.
"While we are not immune to the obvious short-term pressures, Auckland Airport has, to date, demonstrated resilience to the current economic downturn relative to global airport trends and is riding out the storm well," said company chairman Tony Frankham.
"We have a strong balance sheet and business fundamentals; we have invested appropriately in infrastructure and capacity to meet the country's needs; and we have placed even greater focus on managing costs and developing new business opportunities."
"Our strategy to stimulate short-haul demand by welcoming new airlines to compete for business on the Tasman route has succeeded. Healthy competition and great travel deals have helped keep short-haul passenger volumes up sufficient to partially offset steeper declines in long-haul travel."
Airport directors asked an independent valuer to assess the impact of the property downturn on its portfolio of investment property.
"That review has seen the directors adopt a non-cash write-down of investment property values of $41.8 million."
A full valuation of the investment property portfolio will be done later this year as part of its normal end of year financial results.
"While it is difficult to predict future values for the portfolio, particularly given the lack of relevant sales evidence, the directors consider it is possible that the portfolio may be subject to further devaluations given the current trend of softening land values," said Frankham.
Frankham said that "as movements in investment properties are non-cash adjustments they will not affect dividends to shareholders."
The fall in this latest dividend payout is because last year's interim dividend was bumped up to use surplus imputation credits that would have been lost due to "a possible change in ownership."
Total aircraft movements, also were up 2.2 per cent, reflecting new services, increased frequency, and smaller planes being utilised on the shorter sectors.
The economic downturn has particularly affected long haul flights from the Northern Hemisphere. But the short-haul market, particularly trans-Tasman, kept up strong numbers, which helped to maintain passenger demand.
Revenue for the airport is classed as either "aeronautical" - relating directly to the arrival or departure of planes and passengers, or "non-aeronautical" which includes rents and parking charges.
Money coming in from the aeronautical side was up 5.4 per cent to $83.3m in the half year, which is just over 45 per cent of all its revenue.
Non-aeronautical revenue was up 8 per cent to $100.7 million.
