Auckland Airport lifts first-half profit as tourism booms

UPDATED: Strong result for Auckland Airport but regulatory risk firms up

Auckland International Airport [NZX: AIA], the country's largest airport, has reported a 25% lift in first-half profit due to increasing passenger numbers from a rise in tourism, as it plans to spend up to $260 million this financial year to expand its facilities.

Net profit rose to $115.8 million in the six months ended December. 31, from $92.8 million a year earlier the Auckland-based company said in a statement. Revenue for the national gateway rose 12% to $280.6 million.

The results come as the total number of passenger movements was up 6.7% to 8.4 million, with international passengers up 7.2% to 4.3 million. Revenue growth was also underpinned by strong retail performance and growth in aeronautical, property rental and transport income.

Auckland Airport chairman Henry van der Heyden said the company had continued growth across the business, underpinned by new routes, new airlines, and increasing passenger numbers.

"This growth pleasingly occurs at a time when we have lifted our capital investment programme, ensuring we can upgrade and expand our terminals and airfield capacity for passengers and airlines, in turn delivering real benefit to the travelling public."

In October, Auckland Airport updated its forecast capital expenditure for the 2016 financial year to between $230 million and $260 million as a result of growth in the business.

The airport company owns a 24.55% stake in North Queensland Airports, which has airports in Cairns and Mackay, a 25% stake in Queenstown Airport, and is becoming a significant commercial property player with investment in three hotels.

Total profit share from associates was down 24% to $4.1 million with Queenstown Airport performing well up 26% to $1.5 million but the share from its North Queensland Airports dropped 50% to $1.8 million.

It raised guidance for the full year underlying profit in 2016 to between $200 million and $206 million, from a previous range of $183 million to $191 million, and affirmed its forecast capital expenditure.

The board declared an interim dividend of 8.5c per share, with a March 24 record date, payable on April 7.

The shares last traded at $5.89, and have slipped 5.9% this year. The stock is rated an average 'sell' based on six analyst recommendations compiled by Reuters, with a median target price of $4.65.

(BusinessDesk)