KEY POINTS:
Auckland International Airport faces falling long-haul passenger numbers and increasing costs over the coming year but is forecasting a profit about the same as that announced yesterday.
The airport reported a 3.3 per cent rise in full-year adjusted net profit to $103.7 million, partly due to strong growth in domestic passenger numbers and its non-aeronautical business.
The figure for the year to the end of June was after adjusting for one-off items and changes in the fair value of the company's investment properties.
Net profit, including changes in fair value of investment properties and one-off items, was down 51.1 per cent to $113 million.
Barring adverse events and any further deterioration in the global outlook, the company is forecasting a profit of between $100 million and $110 million in the 2009 financial year.
Chief executive Don Huse said the economic conditions the company was now operating in were clear.
"The impact of softer global macro-economic conditions, the rising cost of debt and the slowing domestic economy can be expected to reflect in passenger numbers and business activity."
Growth was down in the numbers of long-haul international passengers, particularly from traditional markets such as the United States and Britain, and it was expected this growth would stay below the long-term average for the next 12 months.
But domestic passenger numbers had grown 13.2 per cent over the past year and this highly competitive market remained strong, Huse said.
The growth of transtasman services would continue with new Pacific Blue services and the arrival in February of Emirates' A380.
"There are new opportunities with transtasman and short haul. We think there is positive news there notwithstanding the environment we're in.
"The lower kiwi is going to be positive for us in terms of inbound and looking at this summer season there is some good news," he said.
Total passenger movements stood at 13.2 million, up 6.9 per cent on last year.
Huse, who retires today after five years at Auckland Airport, said the threat of tighter regulation under the Commerce Act was hovering over the company.
The existing regulatory regime is criticised by airlines as giving airports freedom to set landing charges at any level they like, but Huse said they had ensured sufficient capital investment - unlike other infrastructure in New Zealand. "If it ain't broke why do you need to fix it?"
The company would continue to be exposed to higher costs reflecting factors including an increasingly complex operating and regulatory environment, capital costs associated with the recently completed infrastructure programme and long-term business expansion strategies.
Non-aeronautical business accounts for around 55 per cent of revenue. Retail income was up 10 per cent to $103.4 million; property rental up 21 per cent to $40.2 million and car parking up 13 per cent to $29.3 million.
Shifting the departure tax on to tickets from July 1 had been positive as passengers had more "dwell time" to spend in retail outlets. Income per international passenger had increased by nearly 8 per cent to $13.85.
During the past four years there has been capital expenditure exceeding $500 million, including $143 million during the past financial year. This would slow significantly to between $75 million and $83 million this year.
The company had already delayed making a decision to expand its arrivals processing facilities, which was due for completion by the 2011 Rugby World Cup, and was reassessing developing a hotel on a 180ha business park.
Huse said the changing market conditions had prompted the rethink but he added it was a case of "watching this space".
Huse will be replaced by former high-ranking Telecom executive Simon Moutter.
The company announced a fully imputed final dividend of 2.45c a share is to be paid. That takes the total dividend for the year to 8.2c a share, the same as last year.
Auckland Airport shares closed up 3c at $2.01 yesterday.
