Announcement
INTERIM: AIA: AIA - 1H19 Interim Results
08:30am
AIA
22/02/2019 08:30
INTERIM
PRICE SENSITIVE
REL: 0830 HRS Auckland International Airport Limited
INTERIM: AIA: AIA - 1H19 Interim Results
Media Release | 22 February 2019
Auckland International Airport FY19 Interim Results: Positive start to year
as airport progresses anchor infrastructure projects
Auckland Airport today announced its financial results for the six months
ended 31 December 2018.
Patrick Strange, Auckland Airport's Chair, says, "As one of New Zealand's
busiest hubs for tourism, trade and travel - it has been a positive six-month
period for Auckland Airport, during which we reached some significant
milestones in our 30-year programme to build the airport of the future."
"We are starting to see the early benefits of our multi-billion,
inter-generational aeronautical infrastructure programme delivering
significant new capacity, resilience and choice for our customers, airlines
and operational partners."
"During the six-month period we completed important terminal and
transport-specific projects as well as making significant progress on the
design, planning and procurement phases of our airport of the future
infrastructure programme."
Total passenger numbers at Auckland Airport grew by 3.7% to 10.6 million.
International travellers (excluding transit) reached 5.3 million (up 4.4% on
the first half of FY18), predominantly driven by additional capacity on
Asian, Pacific Island and North American routes. International transit
travellers were down 5.2% to 0.5 million. Domestic travellers increased by
4.0% to 4.8 million, primarily driven by additional capacity on main trunk
routes.
Auckland Airport recorded revenue growth of 11.5% against the prior
corresponding period to $370.6 million. Earnings before interest expense,
taxation, depreciation, fair value adjustments and investments in associates
(EBITDAFI) increased by 10.8% to $277.1 million. Reported profit after tax
was $147.2 million with an underlying net profit increase of 2.9% to $136.9
million.
Queenstown Airport also saw strong passenger growth in the period, with total
passenger numbers growing by 9.3% to 1.2 million. The underlying profit share
from Queenstown Airport decreased 4.5% to $2.1 million due to one-off
expenses relating to its long-term master planning as well as increased
depreciation and amortisation costs. While occupancy at the Novotel Hotel
remained strong during the period, higher operating costs resulted in a
decrease in Auckland Airport's share of underlying profit by 4.5% to $2.1
million. Our total share of the underlying profit from associates was
significantly down on the prior period, which is largely attributable to the
sale of our interest in North Queensland Airports in 2018.
Airport of the future programme
Mr Strange says, "As market conditions have changed over the last two years
and as we have transitioned into more detailed design and planning stages for
a number of major projects, we now have greater clarity about the complexity
of the development programme in our live operating environment and the
challenges associated with New Zealand's construction market."
"We have made considerable progress over the past six months, working closely
with our airline partners to understand their requirements for the new
domestic jet facility and international arrivals projects in particular.
These deeper design insights will deliver improved project outcomes in the
future including planning certainty, improved cost control and a realistic
and achievable build programme."
"This process has led to some scope and sequencing changes for individual
projects within the airport of the future programme, which we remain
committed to."
"Changes to the timing of some infrastructure projects and project sequencing
reviews has supported other aeronautical projects coming forward. Several
anchor projects are currently in procurement stages - including work on our
northern stands and taxiways and northern road network. These are critical
enabling or capacity projects to support the wider airport development
programme. We have also identified a new location for a new cargo terminal
facility, allowing us to initiate a staged relocation of current cargo
facilities away from the terminal precinct," he says.
During the period Auckland Airport continued to improve its benchmark
customer satisfaction 'Airport Service Quality' (ASQ) scores - in both the
international and domestic terminals.
"Going into this next phase of construction we are particularly aware that
our travellers and airlines rely on us to provide safe, timely and efficient
services every day, and we take that responsibility seriously. This will
remain at the forefront of our planning and operations as our investment
journey continues," Mr Strange added.
Major international terminal infrastructure completed
Mr Strange says, "In the six-month period we completed the second of two
major terminal expansion projects, delivering a combined 55,000 m2 of newly
built or refurbished international terminal infrastructure.
"Our airport of the future programme also generated significant new training
and employment opportunities during the period, with Ara, Auckland Airport's
jobs and skills hub, having assisted a further 159 local people during the
period into new roles directly aligned to meeting the future growth and
development needs of the airport and wider South Auckland community," he
says.
Aviation markets
Tourism and trade markets performed in line with expectations despite a
changing aviation market. North America and New Zealand outbound tourism
remained strong while the Chinese market continued to moderate - offset by
emerging Asian markets outside China, notably a quadrupling in passenger
numbers on services from Indonesia and the Philippines.
New capacity was added to the network with Singapore Airlines adding a new
daily flight to Singapore, Air New Zealand launching new direct services to
Chicago and Taipei, and United Airlines returning to year-round services.
Outlook
Our profit outlook for the 2019 financial year remains unchanged. We expect
underlying net profit after tax (excluding any fair value changes and other
one-off items) to be between $265 million and $275 million. This would
deliver growth in the underlying earnings per share of up to 4.5% in 2019,
which is slower growth than in recent years reflecting:
o the second year of lower international passenger charges to airlines of the
new five-year aeronautical pricing period; and
o increasing interest and depreciation expenses associated with the recent
step up in our infrastructure build.
The additional time invested in the formative stages of our key anchor
projects has led to lower capital expenditure than planned for the first half
of the 2019 financial year. We now expect total capital expenditure for the
2019 financial year to be between $280 million and $330 million, down from
the previously indicated range of $450 million to $550 million.
We are still forecasting that the total value of commissioned aeronautical
assets for the 2018-2022 financial years will be broadly consistent with the
five-year forecast envelope released to the market in mid-2017.
This outlook remains subject to factors such as 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.
In regard to Auckland Airport's regulatory and aeronautical pricing update,
please refer to our press release 'Auckland Airport to reduce prices to
airlines' issued today.
ENDS
For further information please contact:
Media:
Stephanie Crush
+64 27 801 9377
stephanie.crush@aucklandairport.co.nz
Investors:
Stewart Reynolds
+64 27 511 9632
stewart.reynolds@aucklandairport.co.nz
End CA:00330910 For:AIA Type:INTERIM Time:2019-02-22 08:30:44
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