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Chch Airport more than doubled annual profit, dividends

Chch Airport more than doubled annual profit, dividends

By Jonathan Underhill

Sept. 9 (BusinessDesk) - Christchurch International Airport, which is 75 percent owned by the city council, more than doubled full-year profit and lifted dividends for the year, including a special payment from proceeds of a property sale.

Net profit rose to $37.8 million in the 12 months ended June 30, from $15.7 million a year earlier, the company said in a statement. Operating revenue rose 22 percent to $159 million, as aeronautical sales climbed 43 percent to $68.3 million and non-aeronautical sales rose 9.7 percent to $90.7 million.

The airport will pay dividends of $20.6 million for 2015, up from $7.6 million in the previous year and including a special dividend of $5.1 million from a gain on the sale of land to the New Zealand Transport Agency. Chairman David Mackenzie said the company expects to increase the percentage of profit paid out to shareholders in the 2016 year.

The airport is among assets owned by Christchurch City Council's investment holding company, which has been flagged for a partial selldown after a report from Cameron Partners last year on options to close the gap between council funding and its share of earthquake rebuild costs. A 25 percent stake in Christchurch City Holdings could be sold, according to reports last year, giving an outside investor a stake in assets including the airport, the power company Orion, Lyttelton Port Co, Red Bus Co, City Care, Enable Services and Ecocentral.

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Passenger movements rose 4.2 percent to 5.93 million in the latest year, as domestic traffic rose 3.3 percent to 4.5 million and international passenger numbers rose 7 percent to 1.5 million. International passenger numbers were helped by the start of China Airlines' direct route to Taiwan. China led growth in international passenger numbers, rising 53 percent, followed by India on 37 percent, while volumes from Australia and Southeast Asia each rose 7 percent.

In the coming year, China Southern Airlines will begin a service from Guangzhou, China Airlines will add capacity, Singapore Airlines will add flights over the summer, and Virgin Australia and Jetstar will add capacity from Australia, and Qantas Airways will add a service to Brisbane. At the same time, Air New Zealand has pledged to add as many as 180,000 domestic seats between Christchurch and Auckland.

"This is a step change in post-quake international air connectivity and will super charge outcomes for every region in the South Island and by default New Zealand,” said chief executive Malcolm Johns.

The book value of the airport company's total assets rose 3.1 percent to $1.2 billion. Debt fell about 3 percent to $296 million.

In May, the Commerce Commission said Christchurch Airport was still targeting excessive returns. The Christchurch, Wellington and Auckland airports are subject to disclosure rules under the Commerce Act and the regulator then reviews their pricing decisions.

The regulator said Christchurch Airport's proposed prices over the 20 years from 2012 to 2032 targeted a return of 8.9 percent, which is higher than the commission’s view that an acceptable return ranges between 7.4 percent and 8.4 percent.

Today, the airport company said the regulator had confirmed aeronautical pricing through until 2017 was "acceptable" and the it would "look at pricing beyond 2017 as part of a full consultation process with airline customers".

The remaining 25 percent of the airport company is owned by the government, whose share of 2015 dividends would be $5.2 million.


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