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Queenstown Airport full-year profit falls 7% on tax-case charge, sales climb 27%

Tuesday 23rd August 2016

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Queenstown Airport Corp, New Zealand's fourth busiest airport, posted a 7 percent decline in full-year profit after recognising a charge related to the loss of a tax dispute, while growth in passenger numbers drove up revenue.

Profit fell to $7.8 million in the year ended June 30, from $8.3 million a year earlier, and included a non-cash provision of $2.6 million related to its adverse tax ruling. Underlying profit rose 27 percent to $10.5 million, matching a 27 percent gain in revenue to $31.5 million.

In July, the airport company lost a dispute with the Inland Revenue Department over whether it should be able to claim depreciation for the cost of constructing its runway end safety area (RESA), with Justice Brendan Brown, in Wellington's High Court, ruling that the RESA didn't qualify as part of the airport runway which would have allowed the airport to claim depreciation.

Operating expenses rose 22 percent to $10 million including costs for runway widening and resurfacing to prepare the airport for evening flights.

“Launching after-dark flights in May was a major milestone for New Zealand aviation and tourism and has ultimately delivered a long-term growth opportunity for the airport and the region’s visitor sector", chairman John Gilks said.

Queenstown Airport welcomed 1.65 million passengers in the latest year, up 18 percent to a record. International passenger numbers rose 19 percent to 474,000, while domestic passengers grew 18 percent to 1.17 million.

"A significant number of these were overseas visitors who transited through Auckland Airport, showing the benefits of strategic partnership with New Zealand’s major international hub airport," the company said. Auckland International Airport owns about 25 percent of Queenstown Airport, while Queenstown-Lakes District Council owns about 75 percent.

Queenstown Airport declared a record $6.3 million dividend, up 21 percent from the previous year.

Auckland Airport is scheduled to report its full-year results on Aug. 29. It is expected to post a profit of about $211 million, up from $176 million a year earlier.

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