Auckland International Airport profit booms, will pay first dividend in three years

The strong return of international travel has boosted Auckland International Airport. Photo / Michael Craig

Auckland International Airport’s full-year net profit after tax fell 77 per cent while its underlying profit boomed, leading to the airport announcing its first dividend in three years.

Reported net profit tumbled to $43.2 million in the 2023 financial year, down 77 per cent on the $191m in net profit that the airport reported in 2022 and a 90.7 per cent plummet from the net profit result in 2021.

On the other hand, underlying profit jumped to $148.1m for the 12 months to June, up from a loss of $11.6m in 2022.

In February, the airport issued a revised earnings guidance of underlying profit after tax of between $125m and $145m. Operating earnings for the 2023 financial period rose 175 per cent to $397.1m.

‘Continue to invest’

Chair Patrick Strange said the latest financial year had been marked by the strong return of international travel and described Auckland International Airport’s (AIA) major upgrade in infrastructure as “essential”.

“It’s vital we continue to invest so we don’t create a drag on the economy and constrain Auckland and New Zealand’s future growth,” he said.

Strange acknowledged in his speech that airlines were questioning the amount of investment AIA was plugging into its infrastructure projects.

“Airlines have asked us to pause investment. We appreciate their concern about cost, as infrastructure is a significant investment.”

The company also declared a final dividend of 4 cents per share, its first dividend in three years, with a $58.9m total value distribution for the year. The airport said its dividend reinvestment plan had been reinstated for participating shareholders and would offer a discount of 2.5 per cent.

Chief executive Carrie Hurihanganui said AIA saw its total number of passengers increase by 183 per cent to 15.9m. “Domestic passenger numbers were up 90 per cent to 8.1 million while international passenger numbers (including transits) rose 480 per cent to 7.8 million.”

‘Price-setting event 4′

The primary entry airport of New Zealand also provided additional information last week to analysts regarding charge increases for landing and various other fees associated with its controlled monopoly aviation services that the airport announced in June.

The pricing has been live since July.

The adjustment falls under the scope of “price-setting event 4″ (PSE4), which encompasses the upcoming five fiscal years spanning 2023 to 2027.

The new aeronautical charges are being independently reviewed by competition regulator the Commerce Commission.

Hurihanganui said on Thursday that the airport welcomed the scrutiny.

The airport forecasts an underlying profit of between $260m and $280m for the 2024 financial year. Capital expenditure was given a guidance of between $1 billion and $1.4b in the year.