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Airport to give up to $200 million to shareholders

30 June 2005

Auckland Airport to give up to $200 million to shareholders and increase ordinary dividends

Auckland International Airport Limited (AIAL) today announced that, following completion of a detailed capital structure review announced in February, the company would proceed with a distribution to shareholders of up to $200 million, comprising a special dividend of 12 cents per share (total $146.7 million) combined with an on-market share buy-back of up to $53 million.

AIAL chairman, Wayne Boyd, said, "The payment of this special dividend and the share buy-back programme reinforces the company's commitment to increasing sustainable returns to shareholders, while ensuring that the company maintains a strong balance sheet to fund the capital expenditure and on-going growth initiatives at Auckland Airport."

The record date for entitlement to the special dividend is 29 July 2005 with the payment expected to be made on 5 August. The special dividend will not carry imputation credits and therefore will be subject to tax based on each shareholder's tax circumstances. The on-market share buy-back programme will be conducted over a 12-month period, commencing after the release of AIAL's full year financial results on 25 August 2005.

The directors of AIAL also propose to increase the ordinary dividend for the 2005 financial year from 90 per cent to 95 per cent of surplus after tax, subject to the approval of the financial results for the year. The exact amount of the final dividend will be confirmed at the time of the announcement of the full year result on 25 August. The formal dividend policy will remain at 90 per cent of surplus after tax.

The distribution to shareholders and increase in the final ordinary dividend will result in the company incurring additional interest costs of approximately $8 million (after tax) in the 2006 financial year. Airport chief executive officer, Don Huse, said "AIAL is currently undertaking a number of significant projects to expand and upgrade the airport's facilities, and this is expected to continue over the next five years and beyond. The current investments include the pier segregation development and retail precinct at the international terminal, and the on-going runway rehabilitation and widening projects.

"Over the last 12 months, the company's management, expert advisers and key aviation stakeholders have undertaken considerable planning work with respect to further development projects. These include a new international pier, the expansion of the international terminal, renovation of the existing domestic terminal and the commencement of the new northern runway. This has involved a detailed assessment of the most suitable approach to expand our facilities to meet current and expected demand.

"We will provide further details of our capital expenditure programme at the time of our annual result announcement in late-August.

"AIAL's approach to increasing returns to shareholders and undertaking significant capital expenditure for the future benefit of New Zealand's travel and air freight industries, the airlines, government agencies and the travelling public, demonstrates management's confidence in the financial position and long-term prospects of AIAL."


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