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Auckland Airport holds its own in first-half, new hotel for RWC

Friday 26th February 2010

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Auckland International Airport lifted underlying tax-paid profit 4.7% to $54.0 million in the six months to December 31, as it announced plans to build a new 125-room budget hotel in time for next year's Rugby World Cup.

The result was achieved on slightly reduced revenue of $182.9 million ($184 million in the prior corresponding period), reflecting a drop in retail revenues at the national gateway airport owing to refitting and changes to duty-free store operations, static aircraft movements, and a slight up-tick in passenger numbers and airport fees. 

Earnings per share of 4.4 cents compare with 4.21 cents at the end of the same six months a year earlier, and AIA is holding its interim dividend at 3.75 cents a share. The dividend record date is March 17, with payment on March 31. AIA shares were unchanged at $1.86on the NZX.

Chairman Tony Frankham said the company was "pleased with our strategic and operational progress over the last six months.  Our financial results are beginning to show some benefit from our business achievements and from an improving passenger volume trend."

Chief executive Simon Moutter said there was "signs of a recovery in travel demand, with our October to December quarter in particular showing consistent growth.  We believe stablility and confidence is slowly but surely returning to the New Zealand travel market."

Total passenger volumes rose in the period by 2.3% overall to 6,782,242, with lower growth in international than domestic passenger numbers, the latter rising 6.1% in the period under review to 3,046,882.  Resurgence in trans-Tasman travel continues to help compensate for a drop-off in long haul routes.

Discussing its purchase of a 24.55% stake in the Cairns and Mackay airports in Northern Queensland, AIA said they were part of AIA's commitment to driving arrivals from Asia, especially on low-bugdet tourist airlines.

The purchase attracted adverse investor commentary, but Moutter said the company stood by its decision.

"We accept full accountability to deliver on expectations and be judged on the results we achieve," he said.  Further detailed planning was under way and performance targets for the investment would be announced later in the year.

The new hotel, to be managed by global operator Accor under the Formule 1 brand, will be completed in time for the Rugby World Cup and be owned by AIA.

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