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Auckland Airport shares climb to 6-year high on better earnings, higher dividend

Wednesday 21st August 2013

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Shares in Auckland International Airport rose to a six-year high after the country's biggest gateway beat earnings estimates and lifted its dividend payment.

The stock rose as high as $3.30 and recently traded at $3.28, up 0.9 percent today on bigger than usual turnover of almost $88 million. The shares have gained 23 percent excluding dividends this year, outpacing the 11 percent gain in the benchmark NZX 50 index, according to Mark Lister, head of private wealth research at Craigs Investment Partners.

"It's been twice as good a performer as the market, and then dividends on top of that - you can't complaint at all about that," Lister said.

Auckland Airport lifted net profit to $178 million, or 13.5 cents per share, in the 12 months ended June 30 from $142.3 million, or 10.8 cents, a year earlier, the country's main gateway said in a statement. That beat First NZ Capital's forecast profit of $155.6 million.

Revenue rose 5.1 percent to $448.5 million, while the value of the airport's investment property gained $23.1 million, and derivative values increased $1.5 million.

The board declared a final dividend of 6.25 cents per share with an Oct. 3 record date, payable on Oct. 17. That takes the annual payment to 12 cents per share, or $158.7 million, up from 14.3 cents, or $158.9 million, a year earlier.

Underlying profit, which strips out one-off items and fair value movements climbed 11 percent to $153.8 million, or 11.6 cents per share, in line with First NZ estimates. Auckland Airport sees underlying earnings rising to between $160 million and $170 million in the 2014 financial year.

Lister said the outlook was a "nice healthy level of growth" and a weaker local currency is probably helping underpin increased interest among international visitors.

Government figures today showed visitor arrivals climbed 6 percent to 173,500 in July from the same month a year earlier, a record for the winter month.

Chief executive Adrian Littlewood today told an investor briefing the airport will seek growth through a coordinated national approach to attract international visitors, bolster its consumer business, improve efficiencies and sharpen up investment, particularly in its property development business.

Last month the Commerce Commission signed off on Auckland Airport's targeted returns of 8 percent per annum between 2013 and 2017, saying it was within the antitrust regulator's acceptable range.

The airport's aeronautical unit lifted earnings before interest, tax, depreciation and amortisation 4.8 percent to $156.3 million. The retail segment increased earnings 4.1 percent to $159.6 million, and its property segment boosted EBITDA 13 percent to $34.6 million.

Domestic passenger movements climbed 8.4 percent to 6.76 million in the year, offsetting a 0.2 percent decline in international passenger movements, including transits, to 7.76 million and a fall by the same amount in aircraft movements to 155,146.

International passenger movements including transits at its Cairns Airport fell 0.8 percent to 666,607, while domestic passenger numbers gained 6.3 percent to 3.6 million. Domestic passenger numbers at the Mackay Airport fell 1 percent to 1.11 million.

Queenstown international passenger numbers jumped 24 percent to 241,714 and domestic passengers climbed 12 percent to 957,204.

Auckland Airport reaped $9.9 million from its investments in North Queensland Airports, Queenstown Airport and Novotel Hotel.

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