Auckland Airport shares fall after it posts flat result

By NZPA

Thursday 22nd February 2007

Auckland International Airport shares fell nearly 2% today after it reported earnings mired at last year's level due to a heavy investment programme and below trend passenger numbers.

Its December half-year net profit was unchanged from a year ago at $51.1 million and it reiterated guidance of a full-year net profit similar to the $103.2m June year profit.

The company has been pegged back by a four-year $500m spending programme, upgrading runways, terminals and other facilities, that has resulted in higher debt and interest payments.

Chief executive Don Huse said it won't be until the 2008 year that the result of the investment start to kick in.

The company was beginning to see early signs of increased passenger growth rates, particularly visitor arrivals to New Zealand.

"The stage is set for much improved earnings growth from the end of the next financial year, with the company having made strong progress towards completing its current investment programme," he said.

It declared an unchanged interim dividend of 3.75 cents per share.

AIA shares closed down 4c at $2.25. They have lagged the top 50 index, rising 1.9% in the first half compared with a 13.2% rise in the benchmark NZSX-50 index.

Chairman John Maasland said the company had increases across all revenue lines.

Total revenue for the six months increased 7% to $159.7m. Earnings before interest, tax, depreciation and amortisation (ebitda) increased 7.8% to $126.2m.

But there was also an expected increase in depreciation and interest costs directly associated with the company's investment programme, combined with higher interest rates.

Accelerating growth in international visitor arrivals, particularly in the last four months of the first half, underpinned a 1.4% increase in total passenger movements to 3.66 million.

International passenger movements excluding transits and transfers increased 0.8 percent to 3.17 million.

Some of the more traditional markets, such as Australia, Britain and the US had solid growth. That was supported by strong growth from newer markets such as China and India, Maasland said.

Domestic passenger movements increased 1.9% to 2.54 million.

Aeronautical revenues increased following controversial landing fee hikes and the completion of terminal expansion and security projects last year.

Retail income rose 8.3%, following the opening of new duty free stores in September 2005 combined with higher passenger spending rates.

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