Daily ShareChat: Auckland International Airport

By Jenny Ruth

Thursday 16th July 2009

Auckland International Airport's decision to defer scheduled increases in its aeronautical charges will hit earnings in 2010, says ABN Amro Craigs analyst Geoff Zame.

The airports international and domestic landing fees had been due to increase 2.5% from July 1. Instead, the airport is discounting international landing fees by about 5% and holding domestic landing fees to recognise "the current challenging economic conditions in the aviation industry." The airport will review its pricing in six months time.

Zame says he has downgraded his forecast earnings per share for 2010 by 3% to reflect these changes. "We had assumed the scheduled 2.5% increase in our forecasts. We now assume (these) pricing revisions apply for the whole of full-year 2010, albeit they are arguably for the first-half of 2010 only," he says.

His forecast airfield revenue for 2010 falls by $4.3 million, or 5.9%, to $69 million and he is leaving all other assumptions constant, assuming no subsequent catch-up but rather a reversion to a 2.5% increase on a lower base from 2011.

Zame is now forecasting a $97.2 million net profit for 2010, down from his forecast $104.2 million net profit for the year ended June this year. The airport will report its 2009 results on August 28.

BROKER CALL: ABN Amro Craigs rate Auckland International Airport (NZX: AIA ) as buy.

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