Photo: LDR / Stuff / Stephen Forbes
Rebounding air travel helped Auckland Airport deliver its first underlying profit in two-and-a-half years.
But the softer property market meant the airport's bottom line was affected by a $94 million investment property valuation decrease.
Key numbers for the six months ended December compared with a year ago:
- Net profit $4.8m vs $108.8m
- Revenue $287.8m vs $126.2m
- Underlying profit $68m vs ($11.5m loss)
- Passenger numbers 7.6m vs 2.8m
- No dividend
Chief executive Carrie Hurihanganui said it was reassuring to see Auckland Airport return to profitability, with 23 airlines flying from the airport to 35 international destinations.
Passenger numbers were at 71 percent of the same period pre-Covid in the 2019 financial year.
Aeronautical revenue was up strongly at $101.5m, while retail income of $59.4m was a marked improvement on the same period the prior year.
Property revenue also contributed to the improved result, up 19 percent to $65.1m.
Chair Patrick Strange said the outlook was for continued growth with an improved guidance for the full year.
The company forecast underlying profit after tax to be between $125m and $145m, compared with the previous guidance of between $100m and $130m.
Strange warned of ongoing challenges in the aviation sector.
"Travellers are feeling the frustration of mishandled bags, airline schedule changes and global staff shortages, as well as the increased likelihood of delays and queues across the aviation system - all issues that are going to take time to resolve," he said.
Hurihanganui said the recent flooding over Auckland anniversary weekend caused "huge disruption" to the airport.
"Like other infrastructure owners, we are taking a hard look at our stormwater system and modelling around climate change to ensure the future capacity we are building into our infrastructure programme is fit for purpose," she said.
The airport revised down its capital expenditure guidance from $600m to $700m to between $525m and $600m, largely due to the phasing of development from design to construction for a number of commercial projects.
The airport expected total passenger numbers to recover to pre-pandemic levels during 2025. For the full 2023 financial year, it forecast overall passenger numbers to be around 16 million.
Ahead of market expectations
Forsyth Barr head of research Andy Bowley said the underlying profit of $68m was ahead of market expectations.
"The strong recovery in profitability was driven by [passengers], but supported by better than expected retail concession yields and very strong property rental income," he said.
Bowley said airline schedules suggested further recovery in services and passengers through the second half of the financial year, returning to 92 percent of pre-Covid levels by the end of the year, compared to 69 percent at December 2022.
"In particular, services to the Americas and Middle East are expected to be at 121 percent and 109 percent of pre-Covid capacity respectively by September 2023," he said.