Despite on-going challenges to passenger numbers, Christchurch
International Airport Limited (CIAL) has reported a profit of
$18.4M (net after tax) for the year ended 30 June 2013.
The reported profit includes a net after tax gain on the
revaluation of investment properties of $5.2M and a non-cash
deferred tax adjustment on non-depreciable buildings resulting in a
$1M reduction in the recorded tax expense.
Chief Executive Jim Boult says the numbers alone do not tell the
story and must be considered with an understanding of current
circumstances.
"Given the reduction in passenger numbers (almost half a million
post quakes), the achievement of $18.4M net profit after tax (last
year $19.6M ) is a satisfactory result," Mr Boult says.
"Comparison of this year's net after-tax profit to last year's
is largely irrelevant due to a number of factors. These
include the fact that the full funding cost of the terminal is now
accounted for as an expense, rather than capitalised to the
project, as was the case prior to completion. In addition, there is
a significantly higher depreciation cost now accounted for, as a
result of the company's investment in the new terminal.
"The combined depreciation and interests costs in the 2013
financial year are $4.5M higher than the previous year. This will
continue into the 2014 financial year."
Mr Boult says the EBITDA level provides a more useful
comparison.
"Excluding revaluation of investment properties and earthquake
costs, CIAL achieved EBITDA of $64.9M (last year $63.9M).
While passenger numbers continue to impact the result, the
company's commercial and property divisions have again performed
strongly. Their performance endorses the company's
decision four years ago to diversify revenue streams."
Mr Boult says CIAL's business is very much fixed cost, so the
cost of running the airfield and terminal does not materially
reduce with lower passenger numbers. He says until passenger
numbers increase, CIAL's result will be continue to be constrained,
although improving commercial revenues will partially offset this.
Core operating costs have continued to increase with the increased
terminal footprint and significant investment in wider
infrastructure across the campus. However, strong emphasis has been
placed on containment of operating costs, which were $1.4M below
budget.
"Recent trends are showing some recovery of passenger traffic,
especially domestic, and we see that as a positive sign for the
future," he says. "Full recovery is not expected until the city's
major facilities are rebuilt, in particular the convention centre
and associated hotels.
"Significant progress has been made this year within our
property division, with completion of two new developments in
Dakota Park and the likely commencement of Spitfire Square, our
retail development, in the near future. We are pleased with the
demand for property on our campus, with three current developments
in Dakota Park now well advanced."
Mr Boult says a pleasing development through the year was
securing a direct route between Christchurch and Perth airports,
with early indications the route will perform strongly. The airport
team also continues to work with airlines on long-haul routes,
especially into China and the USA.
CIAL's balance sheet continued to show growth following the
completion of commercial property developments and the new
terminal, with total assets now at $1,086M (last year $1,036M).
Total capital expenditure for the year was $47M, of which $26.7M
related to the final stages of the new terminal
development.
CIAL currently has sufficient funding facilities in place to
fund its three year business plan and remain well within its
banking covenant ratios.
Last year CIAL successfully completed a $75M long-term bond
issue to replace maturing bank facilities. CIAL continues to focus
on extension of its debt maturity profile and funding
diversification and is currently considering a further issue into
the debt capital markets in the near future. No money is
currently being sought and no applications for securities will be
accepted until an investment statement is available.
