Daily ShareChat: Auckland International Airport

By Jenny Ruth

Tuesday 16th March 2010

The breakdown of Auckland International Airport's first-half earnings showed retail revenue was down because of it reverting to two duty free operators from one previously but they were higher than expected, says Florian Burch, an analyst at ASB Securities.

That was because some redevelopment work in the retail area was deferred to limit disruption during the peak Christmas period.

Passenger service charge revenue was also higher than expected, perhaps reflecting a larger proportion of fee-paying adult passengers, and car-parking revenue was higher than expected while property rental revenue was lower, Burch says.

Growth in international passenger numbers didn't weaken much in February from January but, given the very weak February last year, it was disappointing the numbers weren't stronger, he says.

However, given the March, May and June numbers in 2009 were weak, he remains confident passenger number growth for the full year will be between 2.5% and 3%, "unless Australian visitiors cease gracing us with their presence in such vast numbers." Australian visitor numbers in January were up 17.2%.

Reflecting management's upgrade of its earnings guidance, Burch has raised his forecast for full-year net profit from $98.7 million to $102.3 million and lifted his valuation from $2.23 a share to $2.36.

Investment rating: outperform.

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