Auckland International Airport (AIA) has reported another underlying loss, as the ongoing closure of borders continues to disrupt air travel.
File pic Photo: RNZ / Katie Todd
AIA's new chief executive Carrie Hurihanganui said while the airport continued to operate in a challenging environment, the organisation was looking firmly beyond the near-term volatility to its long-term recovery.
"While the recovery pathway remains uncertain, there is demand for travel and people want to fly as soon as they are able," Hurihanganui said.
Key numbers (for the six months ended 31 December 2021 vs year earlier)
- Net profit: $108.8m vs $28.1m
- Underlying profit: $(11.5m loss) vs ($10.5m loss)
- Revenue: $126m vs $131.5m
- Passenger numbers: 1.7m vs 2.8m
- Dividend no dividend vs no dividend
The one bright spot in the company's half-year result was the strong performance of its commercial property business, which had a 16.6 percent lift in revenue to $54.8 million and valuation gains of $132m.
AIA's bottom line was inflated by the value gain.
Accounting for such one-off items, the company reported an underlying loss of $11.5m as earnings from its aeronautical, retail, transport, hotel businesses, as well as Queenstown Airport, all fell.
The result compares to a forecast from the investment brokerage firm Forsyth Barr of revenue of $126.9m and an underlying loss of $20.1m.
Carrie Hurihanganui. Photo: Supplied
Looking ahead to the rest of the the financial year, the company said additional health and safety measures, such as rapid antigen testing alongside PCR testing, had been introduced to manage the effects of the Omicron variant.
"As we look to the rest of the year, we expect international travel numbers to remain low with overseas experience showing the self-isolation requirements for vaccinated travellers seriously denting demand," Hurihanganui said.
"We continue to work with airlines to ensure this doesn't negatively impact Auckland Airport's future international network connection."
AIA was forecasting a full year underlying loss of between $25m and $50m.
It reaffirmed its capital expenditure guidance of between $250m and $300m.
The company had also reached an agreement with its bankers to lower its interest coverage covenants that were agreed to in August last year for between June 2022 and June 2024, to reflect the impacts of domestic travel restrictions during the first six months of the 2022 financial year.
Forsyth Barr analyst Andy Bowley said while the result bettered its forecast it was largely due to lower than expected depreciation costs, which compensated for weaker underlying earnings.
He said its balance sheet looks safe, breaches of banking convenants appear unlikely and the return of dividend payments looked favourable in the next financial year.
