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Auckland Airport profit ahead of forecast

Thursday 26th August 2010

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Auckland International Airport said its underlying net profit after tax reached $105.05 million in fiscal 2010, ahead of its initial guidance, reflecting in part lower operating and capital expenses.

As for the year ahead, the company said it expected underlying profit, which excludes any fair value changes and other one-time items, to rise to between $112 million and $118 million. That assumes international passenger growth of about 5%, it added.

"Progress on our growth strategy has been excellent," Chief Executive Simon Moutter said in a statement to the stock exchange.

"We have completely refocused the business."

Revenue was down 1.4% to $363.1 million over the year. The decline was less severe than initially expected given the soft operating environment and the anticipated impact from the reversion to a dual duty free operator model.

Auckland Airport said operating expenses were cut 2.3% to $86.8 million and capital expenditure fell 38% to $54.3 million. Capital spending is forecast to be about $85 million in fiscal 2011, it said.

Operating cash-flow at the airport reached $176.3 million in the year just ended, up 3.6% from 2009, it said.

Auckland Airport Chairman Tony Frankham said the company "is now positioned to turn travel demand growth into profit growth".

The airport said it was voted by passengers worldwide for a second year in a row as one of the world’s top 10 airports, in the annual Skytrax awards.

During fiscal 2010, international passenger volumes, excluding transits, showed resilience, rising 2.4%, predominantly driven by a relatively strong Australian economy, increased capacity on the trans-Tasman routes, airfare competition, as well as tactical promotional activity initiated by Auckland Airport.

Domestic passenger volumes showed consistent strength to grow 7.8% over the year, largely reflecting the impact of a full year of operations by Jetstar.

IATA is forecasting a more promising 2011 for the aviation sector but again recommends caution. This is combined with a global economic outlook that, while improving, remains fragile, the company said.

Businesswire.co.nz

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