Good first half has AIA lift forecast

Auckland International Airport has lifted its full-year profit forecast while delivering an improved result for the six months ended December.

The company, which owns a share of Queenstown Airport, reported a net profit of $85.9 million for the period, up 11.7% on the previous corresponding period. The underlying profit, which is becoming a popular measure for listed companies, was 86.7 million, up 14%.

The operating earnings, which is what the company earns after expenses are deducted from revenue, was up 7% in the period to $177.9 million. Revenue was also up 7% to $238.5 million.

Airport chairman Sir Henry van der Heyden said the company had earlier outlined its expectations the full-year profit would be $160 million to $170 million.

Yesterday, the company lifted its guidance to $166 million to $172 million.

No dividend was declared but Auckland Airport is returning $454 million of capital to shareholders.

Craigs Investment Partners broker Chris Timms said the company would cancel one in 10 shares and return $3.43 per 10 shares held. The payment, while not stated, would be in lieu of an interim dividend.

From a tax perspective, $1.37 would be deemed a capital return and $2.06 a fully imputed capital return. Investors should expect only a normal second-half dividend in October.

The result was in line with Craigs' expectations, with the slight miss being attributed to the rise in staff expenses due to the strong growth in the company's share price and the impact it had on the company's long-term incentive scheme.

''The retail contribution disappointed, as passenger spend fell 3.1%.

"While we had anticipated the impact from the tobacco law changes, the mix impact from the Chinese arrivals since October, as well as the weakness of the Australian dollar, had not been anticipated.''

Sir Henry said the company had renewed its focus on becoming a southern hub airport for the Pacific Rim.

''Our focus on growing travel markets has resulted in new routes and additional seat capacity.''


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