More passengers boost Auckland Airport's profit

Auckland International Airport’s [NZX:AIA] profits were up in the first half of its financial year, on the back of increased passenger numbers through its gates.

The company’s profit after tax for the six months to December 31 was up 17% to $165.9 million while underlying profit after tax increased 7.8% to $133.1 million.

Revenue increased 6.9% to $332.4 million. A 2.7% increase in aeronautical revenue was driven by passenger growth and increasing runway movements, partly offset by international and regional aeronautical price decreases. It saw a 10.2% increase in retail income.

Earnings before interest expense, taxation, depreciation, fair value adjustments and investments in associates (ebitdafi) were up 6% to $250.1 million while operating expenses increased 9.7% to $82.3 million. Staff costs were up 9.6%.

The total share of underlying profit from associates was $11.2 million in the first-half, up 47.4%. The underlying profit share from Queenstown Airport increased 46.7% to $2.2 million and the share from the Novotel hotel was up 120% to $2.2 million. Its underlying profit share from North Queensland Airports grew by 33.3% to $6.8 million.

The airport announced last month it is selling its quarter stake in the Cairns and Mackay airports in North Queensland to its fellow investors for $A370 million, almost three times what it paid eight years ago.

The board declared an interim dividend up 7.5% to 10.75c a share. It will be imputed at the company tax rate of 28% and paid on April 5 to shareholders on the register on March 20. Underlying earnings per share are up 7.3% to 11.1c a share.

Chairman Sir Henry van der Heyden has tightened full-year underlying profit after tax (excluding any fair value changes and other one-off items) guidance to between $250-257 million.

This would deliver underlying earnings per share growth of between 0.6% and 3.5% compared with the 2017 financial year.

“In the first half of the 2018 financial year Auckland and New Zealand’s air connectivity has continued to grow, providing new services and new capacity,” he says.

In the six months to December 31, the total number of passengers increased by 6.4% to 10 million.

Domestic passenger numbers were up 7.7% to 4.6 million, international passengers (excluding transit passengers) were up 5.8% to 5.1 million and the number of international transit passengers decreased 1.7% to 348,000.

More to come.