Forum Archive Index - March 2003

["G Stolwyk" <stolwyk@wave.co.nz>]

I wrote this as an answer to a trader who thought that AIA was worth $4.90 and no more:

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A. Even if there were no planes flying, AIA still collects 52.8% of the normal expected revenue. Yes it has a money printing machine.

B. When the planes do fly, they also collect 16.2% of revenue in Departure tax or Airport Development Charge (ADC).

 Now, the latter can't be booked as profit as it is used to build new runways and extend the Airport. (The second new runway will cost about $140 mill.- $170 mill., add taxiways and installations).

However, it will build assets for AIA. About $35 mil. Departure tax to spend this year and it is growing! (The NZ Government gets a share as well).

So, when you combine these two sources of income, then 70% of revenue is collected with little cost involved.(Retail and Investment Property rentals, Carparks, Utilities and Development charge).

Show me one company in the whole world which can do that?

AIA is of course the most profitable Airport in this world!

Gerry

 Current price $5.20 (+5). It is also 9.5 cents ex div.

 

The guided forecasts were up to $79 mill. NPAT and could have approached $80 mill. in normal circumstances.

 

Mine was $78 mill and I'll drop that now to $77 mill. There are 304 mill shares. P/E=20.5.
Fully imputed div. yield: 5.4%-5.7%