Auckland Airport staff bonus as tourism boom lifts profit   29 Aug 2016

Monday 29 August 2016 11:03 AM

Auckland Airport pays staff $1,500 bonus as tourism boom lifts 2016 profit by 17.4%

By Fiona Rotherham

Aug. 29 (BusinessDesk) - Auckland International Airport is paying its staff a $1,500 performance bonus after full-year profit and revenue benefited from the country’s tourism boom and a significant uplift in the number of international airlines and capacity servicing Auckland.

In the year to June 30, total passenger movements were up 9.1 percent to 17.3 million while international passengers (excluding transits) rose 8.1 percent to 8.8 million and domestic passengers increased 9.8 percent to 7.9 million.

That tourism uplift has attracted 8 new international airlines during the 2016 financial year and seen 15 new routes established and flight frequencies increased on existing routes. Domestically the arrival of Jetstar on regional routes to compete against Air New Zealand has also increased flight capacity.

Chairman Henry van der Heyden said to support that growth, the company had started a major upgrade of its international departure area and the planning and design work on a combined domestic and international terminal building and second runway.

It was also paying a performance bonus of $1,500 before tax to staff who don’t participate in the short-term incentive scheme, a move that mirrors the $2,500 one-off bonus Air New Zealand announced to staff when releasing its full-year results on last Friday.

Shareholders will also benefit from a 9 cents-per-share fully-imputed final dividend to be paid on Oct. 13, taking total dividends for the year to 17.5 cents per share, a 19.9 percent increase on the prior year.

Auckland Airport’s net profit rose 17.4 percent to $262.4 million while underlying profit rose 20.6 percent to $212.7 million.

The company added new retailers and passengers products which boosted revenue by 12.9 percent to $573.9 million while expenses also rose 11.8 percent to $143.6 million, in part due to extra professional services related to its infrastructure projects, airline marketed, and increased out-sourcing transport and hotel activity. Retail had a strong performance up 19.3 percent to $157.5 million, aeronautical landing and passenger charges were up by 10.3 percent to $258.3 million, and transport up 11.8 percent to $52.1 million.

Van der Heyden said the company’s continued strong growth and performance meant the board was confident of similar results in the next financial year, with forecast underlying net profit after tax (excluding any fair value changes and other one-off items) for 2017 to be between $230 million and $240 million. That would mean an increase in underlying earnings per share of between 8.1 percent and 12.8 percent, he said.

When reporting against its five-year strategic plan announced in 2013, Auckland Airport said it aspired to double Chinese arrivals to 400,000 by 2017 and had had just under 360,000 in 2016. It has already surpassed by $3 million this year its target of building property rent roll to $60 million by 2017 and international passenger number are just 600,000 shy this year of the 2018 target of 10 million. It also wants to reach 20 million total passengers by the 2020 financial year, up from 14.5 million in 2013 and hit 17.3 million this financial year.

The airport company's shares rose 0.4 percent to $7.23 and have gained 46 percent in the past 12 months, outpacing a 31 percent gain in the S&P/NZX 50 Index. The stock is rated a 'sell' based on a Reuters survey of analysts with a median price target of $5.98.

(BusinessDesk)

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