Strong first-half trading has prompted Auckland International Airport to upgrade its profit-after-tax guidance for the full year to between $200 million and $206 million, an increase of 8%-9%.
Half year to December revenue was up 11.6% to $280.6 million, earnings before interest expense, taxation, depreciation, fair value adjustments and investments in associates (ebitdafi) rose 13% to $213.5 million and after-tax profit was up 24.8% to $115.8 million.
AIA chairman Sir Henry van der Heyden said revenue growth was underpinned by strong retail performance, as well as favourable growth in aeronautical, property rental and transport income.
"Our total share of profit from associates was $4.1 million for the first six months of the 2016 financial year, down 24.1%,'' he said.
Because of AIA's strong growth and performance it was now lifting and tightening its guidance for the full year to between $200 million and $206 million, he said.
AIA declared an interim 8.5c dividend. After the announcement, its shares rose almost 3.6% to $6.10.
Forsyth Barr broker Suzanne Kinnaird said it was a "very strong'' first-half result, given underlying after-tax profit was up 19% to $104.4 million.
"With aeronautical income known, given monthly operating statistics, the key drivers of the better-than-expected result were retail income growth and lower-than-expected interest costs.''
Retail income was up 21%, driven by strong specialty sales, up 27%, while interest costs were lower, reflecting lower funding rates and higher levels of capitalised interest, including capital expenditure of work in progress.
"Notwithstanding the strong result, rising capex has lifted net debt, now at $1.8 billion,'' she said.
She said growth in airline capacity over the next 12 months provided scope for "sustained above-trend'' passenger growth, supportive of further earnings growth in the second half of 2016.
Craigs Investment Partners broker Peter McIntyre said given a half that had a 7.05% rise in international and 6.22% gain in domestic passenger numbers, "the result was always going to be good''.
Sir Henry said AIA had continued to see growth right across the business, underpinned by new routes, new airlines and increasing passenger numbers.
The growth had occurred as AIA lifted its capital investment programme, ensuring upgrades and expansion of terminals and airfield capacity for passengers and airlines, he said.
At a glance
Auckland International Airport ... six months to December.
• Total passenger numbers up 6.7% to 8.4 million.
• International passengers (excluding transits) up 7.2% to 4.3 million.
• Domestic passengers up 6.2% to 3.9 million.
• *Forecast 2016 capital expenditure between $230 million and $260 million.
• Queenstown Airport profit share up 25.8% to $1.5 million.
• North Queensland Airports profit share down 50% to $1.8 million.
• Novotel hotel profit share up 33.3% to $800,000.
SOURCE: AIA
