Auckland Airport confirms earnings guidance of $160-$170 mln   23 Oct 2014

Auckland Airport confirms earnings guidance of $160-$170 million

By Fiona Rotherham

Oct. 23 (BusinessDesk) - Auckland International Airport, the country’s main gateway, has confirmed it’s likely to deliver an underlying net profit of between $160 million and $170 million this financial year, in line with the guidance it gave in August.

Chairman Henry van der Heyden said at the annual meeting in Auckland today, his first address to shareholders, that the result would be broadly in line with the underlying net profit the airport recorded in the June 30, 2104, financial year.

Following a strong financial performance last year which included a $454 million return of capital to shareholders in April, the company said its main focus for this financial year was continuing to implement its business strategy – Faster Higher Stronger. The strategy involves growing travel markets, strengthening its consumer business, being faster and more efficient, and investing for future growth.

Despite a slower start to passenger growth this year compared with last year, industry feedback suggests this upcoming summer will be one of New Zealand’s busiest ever, said chief executive Adrian Littlewood.

The company has been opening additional retail, food and beverage stores including a new DB bar at the international terminal and Littlewood said it planned to open several more in the next 12 months. It’s also considering bids for the duty free concession tender with a decision due early next year. In the first few months of the year online duty free sales have been eight times higher than they were in the previous year.

It has also started the 50 percent expansion of the Ibis hotel following growth in its hotel business in recent years and is planning for a third hotel at the airport.

Littlewood reiterated plans for its 30-year vision for the airport which will see build a long-delayed second runway on airport-owned land around 2025 to cater for an expected almost trebling of passenger numbers to 40 million by 2044. The second runway may also need to be extended in 30 to 50 years to meet the needs of the larger aircraft forecast to fly into Auckland in future, he said.

The first part of the vision - a 2,500 square metre expansion of the international baggage hall - is due for completion by the end of next month. The expanded hall, the first step towards a combined domestic and international terminal, will increase net lettable area for retail stores by up to 80 percent.

Work has also begun on a concept design to expand the international terminal’s departure area to handle the forecast higher passenger numbers. The airport did a $26 million upgrade of its domestic terminal building last year which Littlewood said gave it plenty of time to develop a planned new domestic terminal.

(BusinessDesk)

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