Auckland International Airport

By Dan Stratful

Friday 3rd February 2012

Auckland International Airport (NZX: AIA ) will likely be a real beneficiary of the Rugby World Cup (RWC) when it reports it full year results later in the year and the airport has shown good traffic growth numbers over the key RWC months of September and October 2011.

AIA listed on the sharemarket in 1998, when the Government sold down its shareholding, and AIA became the fifth airport company in the world to be publicly listed.

Over 70% of visitors to New Zealand enter or leave via Auckland Airport, and the AIA group now owns stakes in Queenstown, Cairns and Mackay Airports.

Passenger numbers through Auckland currently stand at 13 million a year, expected to grow to 24 million a year by 2025.

During the key RWC months of September and October 2011 AIA reported buoyant numbers, with total international passenger volumes increasing by 5.3% at Auckland Airport in September 2011, when compared to September 2010, and overseas international passenger arrivals were up 34%.

October 2011 also showed an increase in total international passenger volumes which increased by 9.3% when compared to October 2010, while total international visitor arrivals were up by 19%.

The momentum also carried over into November 2011 with a 5% increase in total international passenger volumes at Auckland.

Despite a strong local currency against most major currencies (excluding Australia) New Zealand is still pulling in the visitors and most will travel through AIA’s gates.

AIA reported an underlying profit of $121 million in the year to 30 June 2011 (FY11) and it expects over $130 million in profit in the current year ending 30 June 2012 (FY12).

The shares have performed well but due to the recent strong run, unfortunately all of the good news is priced in, with AIA trading at 27x FY11’s earnings and 23x FY12 forecast earnings.

Status: HOLD

AIA’s shares today traded at $2.48

For sharemarket and fixed income trading enquires contact:
Dan Stratful at Investment Research Group (IRG)
Authorised Financial Adviser (AFA)
0800 437 8489, 09 304 0232, dan.stratful@irg.co.nz
**A disclosure statement is available, on request and free of charge.

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