Another year of growth and strong results for Auckland Airport

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Auckland Airport has today announced its financial results for the 12 months to 30 June 2016.

Auckland Airport Chair, Sir Henry van der Heyden, says, “The company has had an excellent 12 months and delivered strong results for its community and city, its country and investors.”

“It has been another year of growth right across our business. We have seen a significant lift in the number of international airlines and capacity servicing Auckland. We have added new retailers and passenger products and we have also completed several large property developments this financial year. To support this growth, we have commenced a major upgrade of our international departure area, and have continued the planning and design work required to successfully construct our 30-year vision’s combined domestic and international terminal building and second runway. Finally, we have continued to focus on playing a leadership role for New Zealand’s tourism and aviation industries.”

“Our ongoing strong performance is a result of the commitment and hard work of Auckland Airport’s people ̶ staff, contractors and consultants – our greatest assets. It is also the result of the combined efforts of the people in our local community, our airline and other commercial partners, the government’s border agencies and every other business that plays an important part in the airport’s day-to-day operations. To recognise the efforts of our team and the exceptional performance in the 2016 financial year, we will pay a performance bonus of $1,500 (before tax) to all permanent employees who do not participate in the short-term incentive scheme.”

In the 12 months to 30 June 2016, the total number of passenger movements was up 9.1% to 17.3 million. International passengers (excluding transits) were up 8.1% to 8.8 million, and domestic passengers were up 9.8% to 7.9 million.

Revenue was up 12.9% to $573.9 million, while expenses were up 11.8% to $143.6 million. Earnings before interest expense, taxation, depreciation, fair value adjustments and investments in associates (EBITDAFI) increased 13.2% to $430.3 million. Total profit after tax was up 17.4% to $262.4 million, while underlying profit was up 20.6% to $212.7 million. As a result of this, Auckland Airport’s underlying earnings per share was up 20.6% to 17.9 cents for the 2016 financial year.

The final dividend is 9 cents per share. This results in a total dividend this financial year of 17.5 cents per share − representing an increase of 19.9% compared with last year. The final dividend is imputed at the company tax rate of 28% and will be paid on 13 October 2016 to shareholders who are on the register at the close of business on 29 September 2016.

Revenue growth was achieved, once again, through strong performances by retail (up by 19.3% to $157.5 million), aeronautical (landing and passenger charges up by 10.3% to $258.3 million) and transport (up by 11.8% to $52.1 million). The strong growth in retail revenue this financial year provides the company with confidence to construct a new international retail hub, part of the upgrade of our international departure area.

Operating expenses increased by 11.8% to $143.6 million this financial year, in part due to professional services related to our infrastructure projects, airline marketing and increased out-sourced transport and hotel activity.

Including the impact of valuation changes, our share of profit from associates was a loss of $8.4 million. This included our share of North Queensland Airports’ asset impairment of $16.0 million, its fair valuation loss on financial instruments of $8.1 million and its investment property revaluation gain of$1.7 million, as well as our share of Novotel Auckland Airport’s gain on investment property of $2.3 million and its fair valuation loss on financial instruments of $100,000.

After adjusting for non-cash valuation impacts, the total share of underlying earnings from our associates was $11.5 million this financial year, an increase of 7.5% on the previous year. Our share of underlying earnings from North Queensland Airports increased by 8.2% to $7.9 million. Our underlying earnings share from Queenstown Airport was down by 6.0% to $1.9 million due to the settlement of its Inland Revenue litigation. Our underlying earnings share from Novotel Auckland Airport was up by 30.8% to $1.7 million.

“Our continuing strong growth and performance means that we are confident that the company will continue to deliver strong financial results in the next 12 months. We expect underlying net profit after tax (excluding any fair value changes and other one-off items) for the 2017 financial year to be between $230 million and $240 million. This guidance would deliver an increase in underlying earnings per share of between 8.1% and 12.8%,” says Sir Henry.

“As always, this guidance is subject to any material adverse events, significant one-off expenses, non-cash fair value changes to property and deterioration as a result of global market conditions or other unforeseeable circumstances.”