Auckland airport says profit may rise 12%

Thursday 28th October 2010

Auckland International Airport says annual profit may rise as much as 12% this year as the recovery in the global economy drives growth in passenger numbers.

Net profit will be $112 million to $118 million in the year ending June 20, 2011, up from last year’s underlying net profit of $105.1 million, the company told shareholders at its annual meeting today. The forecast growth is based on expectations of 5% growth in passenger numbers and $85 million in capital expenditure, it said.

New Zealand’s tourism sector has have begun to rebound in the wake of the global recession with international passenger movements up 4.6% to 1.6 million in the three months to September 30. Domestic passenger rose 4.1% to 1.55 million in the same period.

“With our growth strategy beginning to deliver results, our underlying profit for 2010 is ahead of where we expected to be, and with the business fundamentally restructured, Auckland Airport is well positioned to benefit in 2011 and beyond from the operating leverage we have been able to set up,” chairman Anthony Frankham said.

A key goal for the year ahead is to expand air-links with growth markets in Asia, the Middle East and Latin America, seen as a key driver of passenger traffic, business activity, and high-value exports.

Additionally, stakeholder and shareholder management would a critical issue now that its two biggest shareholders, Auckland City Council and Manukau City Investments, had been consolidated with the formation of the Auckland Super City.

The company is also awaiting a Commerce Commissions report on a regulatory framework for major airports in New Zealand, which is expected before the end of the calendar year.

“We look forward to the completion of this process, and to having clear understanding between airports and airlines on regulation and on investment incentives,” Frankham said. “It is essential for New Zealand that airports continue to have appropriate incentives to provide the capacity necessary to support our country’s ambitions to grow trade and tourism.”

Frankham said the airport is well prepared for next year’s Rugby World Cup, and will complete two new on-site hotels ahead of the event to cater for the influx of fans and teams.

In relation to dividends, the board will maintain a policy pay-out ratio of 90%.

Shares were unchanged at $2.11, and are trading near range last seen in 2008.

Businesswire.co.nz

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