Auckland Airport stays within forecast

Thursday 29th October 2009

Auckland International Airport, the country’s major gateway to the world, has kept its earnings guidance amid small gains in total passenger volumes in the last quarter.

The airport kept its forecast for full-year profit between $93 million and $100 million, chairman Tony Frankham told shareholders at the company’s annual meeting in Auckland today. Total passenger volumes grew 1% in the three months ended September 30, with international passenger gaining 1.2% to 1.6 million and domestic passenger movements up 5.1% to 1.5 million.

“Forecasting is difficult when global travel-demand conditions are unstable and passenger volume growth remains uncertain,” Frankham said. “While it is too soon to say with confidence that market conditions are rebounding, there are certainly some positive signs emerging in some markets, for example the United States, that indicate that passenger volume declines may be slowing.”

Auckland Airport has had to contend with a slump in tourism as the global financial crisis wiped demand for international travel. Profit slumped 63% in the 12 months ended June 30. The shares fell 1.5% to $1.95 today and have climbed 22% this year.

The struggling tourism industry lost its title as New Zealand’s biggest export earner for the first time in seven years after government figures showed international visitors spent $9.3 billion in the 12 months ended March 31, its first decline in a decade. Dairy exports topped the list with about $10 billion earned over the period.

Alan Moore, who helps manage $350 million at Milford Asset Management, said Auckland Airport had done well “given all of the problems” facing it over this past year.

“It’s done pretty well in a very difficult environment,” Moore said. “It was helped by Jetstar and Pacific Blue increasing their presence in New Zealand.”

Frankham told the meeting the two airlines underpinned demand for trans-Tasman travel, which bolstered the country’s tourism sector this year.

Earlier this year, Prime Minister John Key and Air New Zealand launched a joint marketing campaign to lure Australian visitors across the Tasman. Key estimated the campaign would inject $65 million into New Zealand’s economy.

Along with looking to boost the number of passengers going through the airport, the board is looking to increase its yield from passengers, Frankham said.

“We have focused on providing customers and passengers with a greater range of products and services to meet their different needs, from premium and budget,” he said. “These efforts have seen a pleasing growth in retail revenue over the financial year.”

Yesterday, the airport launched the second of two retail bonds issued this year as it looks to raise a total of $180 million to bolster its balance sheet. Auckland Airport expects to spend $60 million to $65 million on capital expenditure, excluding yet to be committed property development.

Businesswire.co.nz

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