Auckland Airport has posted a rise in its retail income for the six months to December 31, 2018, primarily driven by its investment in infrastructure in recent years and the expansion of its retail area in the international terminal.
The company posted a 24.6 per cent increase in retail income for the half to December buoyed by the expanded retail area and the passenger growth and strong performance from Strata Lounge.
Total profit after tax for the six months declined 11 per cent to $147.2 million, while underlying profit after tax increased 2.9 per cent to $136.9 million.
Revenue increased 11.5 per cent to $370.6 million.
The Auckland Airport posted a 5.8 per cent increase in aeronautical revenue driven by passenger growth and increasing aircraft movements, partly offset by its second successive year of a reduction in some of its aeronautical tariffs.
Patrick Strange, Auckland Airport’s chair, said they have reached some significant milestones in their 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,” Strange said.
“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.”
The terminal posted a 3.7 per cent increase in total passenger numbers to 10.6 million. International travellers (excluding transit) reached 5.3 million, up 4.4 per cent 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 per cent to 0.5 million.
Domestic travellers increased by 4.0 per cent to 4.8 million, primarily driven by additional capacity on main trunk routes, Auckland Airport said.
Strange said their profit outlook for the 2019 financial year remains unchanged. He said they are still expecting 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 per cent in 2019, which is slower growth than in recent years reflecting the second year of lower international passenger charges to airlines of the new five-year aeronautical pricing period; and increasing interest and depreciation expenses associated with the recent step up in our infrastructure build.
He said the additional time invested in the formative stages of their 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.”
According to Strange, they 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.
