Daily ShareChat: Auckland International Airport

By Jenny Ruth

Tuesday 20th April 2010

Auckland International Airport's earnings are poised to rebound over the year ending June 2011 and beyond, says First NZ Capital analyst Rob Bode.

"Retail concession revenues are expected to rebound strongly in 2011, which coupled with programmed increases in aero charges and accelerating international passenger traffic should drive a pick-up in earnings," Bode says.

He is expecting earnings-per-share to brow by one third over the next three years, representing slightly more than 10% compound annual growth through to the year ending June 2013.

Based on the Ministry of Tourism's preliminary forecast the 2011 Rugby World Cup (RWC) will generate 85,000 international visits to New Zealand, he estimates the airport's international passengers will rise 6.5% in the year ending June 2012 with between 1.75 and 2 percentage points coming from the cup.

He estimates the airport's domestic passenger movements will rise about 10% in September and October 2011 as a result of the cup.

The incremental operating earnings from the cup will be between $4 million and $4.5 million, boosting the bottom line by about $3 million in the year ending June 2012, Bode says.

While useful, that gain doesn't affect the airport's long-run valuation.

"The more intangible but more valuable boost to (the airport's) value is expected from international publicity that RWC will enjoy and longer-term spin-off benefits that could be produced for New Zealand Tourism."

BROKER CALL: outperform.

Comments from our readers

No comments yet