Auckland Airport lifts profit outlook
Auckland International Airport has upgraded its profit outlook for the full year after construction of its improved domestic terminal started late but is forecast to come in under budget.
AIA has also announced an 11.3 per cent increase in net profit for the half year compared to the first half of the 2011 year, thanks in part to stronger domestic passenger traffic through its Auckland terminal - up 7.2 per cent over the same period the year before.
However the domestic terminal has long been struggling to cope with rising domestic passenger and aircraft traffic and new airport chief executive Adrian Littlewood said the short-term solution should be fully in place by June 2014.
Despite starting the domestic terminal project slightly later than expected in January, better pricing achieved in a "soft" construction market meant forecasted capital expenditure for the full year would reduce by up to $10m to between $90m and $100m.
AIA had therefore revised its full-year profit forecast upwards to between $145m and $153m.
The terminal upgrade is expected to cost a "modest investment" of $29m but will cater to new A320 aircraft, said Littlewood.
"It's really about taking the sharp edges off a legacy asset," he said.
"This [refurbishment] will allow us to carry through the period to about 2016 when we need to be delivering permanent new capacity in a new facility and we are working very closely with our airline partners and all stakeholders on designing that future."
The increase in domestic traffic included more than 600,000 passenger movements in the month of December, making it the airport's busiest month ever.
The airport said the numbers reflected the "significant positive impact of additional capacity by both Jetstar and Air New Zealand and robust competition".
Meanwhile, international passenger traffic through Auckland was down 1.8 per cent on the previous corresponding period which included significant Rugby World Cup passenger flow.
The decline also reflected a 24.5 per cent drop in transit passengers due to the axing of Qantas' Los Angeles route through Auckland from Sydney and Aerolineas Argentinas' Buenos Aires route.
AIA's half-year net profit of $76.9m came off revenue of $223.5m, up 3.6 per cent, while expenses, excluding depreciation and interest costs, were also up 4.9 per cent.
AIA reported earnings before interest, taxation, depreciation, fair value adjustments and investments in associates of $166.3m, up 3.1 per cent from the first half of 2011.
The company said underlying profit had increased 7.5 per cent to $76.1m, supported by lower interest costs and higher associate-company contributions.
The NZ Superannuation Fund has sold a 7.6 per cent chunk of its stake in the airport but has kept a 1.8 per cent shareholding.
Queenstown Airport, in which AIA has 25 per cent ownership, saw international passenger volume increase, excluding transits, 16.8 per cent to 139,000 and its domestic volumes also grew 22.3 per cent to 488,000.
Queenstown Airport reported a net profit after tax of $3.1m, up 11.7 per cent on the first half of 2011.
AIA's partial stakes in North Queensland Airports, including Cairns and Mackay, had a strong six months, reporting a net profit after tax of A$9.4m, up 61.3 per cent on the prior period, however dividends paid shrank 8 per cent.
AIA announced an interim dividend of 5.75 cents per share, an increase of more than 30 per cent on the prior year interim dividend.
The dividend is payable on April 2 to shareholders on the register at March 15.