KEY POINTS:
Auckland International Airport reports its full-year profit this week with one analyst forecasting retail and property activity to be a feature of its first result since emerging clear of takeover attempts.
Forsyth Barr analyst Jeremy Simpson expects profit to be up 9.1 per cent to $99 million based on a 5.6 per cent increase in revenue to $340 million.
Non-aeronautical revenue makes up about half the airport's business, and new retail concessions, more carparking and a growing property portfolio are expected to again be a highlight of the result on Thursday.
Simpson said other positives included robust passenger growth reflecting new capacity and competition and the continued strength of the market in Australia and parts of Asia.
Figures for June showed domestic passenger volumes up strongly at 18.7 per cent compared with the same month last year, and up 13.2 per cent on a 12-month rolling basis.
While long-haul international passenger numbers were mixed, the transtasman market shows continuing strength and remains lively with Pacific Blue announcing new services to Melbourne and Sydney and Air New Zealand expanding its range of products for passengers.
In his result preview, Simpson says another positive is signs of capital spending plans tightening - arising from a forecast of softer domestic passenger growth .
Another negative is softer retail spending, given weak domestic economic conditions. Higher interest and depreciation costs could also bear on the result.
Simpson said the airport remained a quality long-term investment as a tourist gateway and because of its "strategic" landholding.
"However, the near-term remains challenging due to the impact of the strong dollar on visitor arrivals, regulatory uncertainties and the slowing domestic and global economy."
But another analyst said he did not believe there was likely to be much in the way of upside in the results.
ABN Amro analyst Geoff Zame said he expected the results to be similar to forecasts put out in the target company report released during the Canada Pension Plan's failed bid.
He put profits after tax at $95.3 million with $10.9 million in one-off expenses, including costs associated with the partial takeover bid.
Of note would be the company's outlook and guidance for the year ahead with a focus on capital expenditure, dividends and outlook.
"Broadly speaking the business is well-positioned in terms of plenty of capacity there. But the outlook for growth is subdued at the moment."
Zame said there were early indications that the Pacific situation was turning around, with Pacific Blue recently announcing new routes between New Zealand and Australia. The fall of the New Zealand dollar was also likely to be positive, but he expected little growth in the business over the next financial year.
Takeover activity first emerged late in 2006 when an unnamed foreign buyer approached the company, and intensified in the middle of last year when Dubai Aerospace Enterprise entered the fray followed by the Canada Pension Plan.
The Canadian's partial takeover offer was eventually enthusiastically accepted by shareholders but vetoed by the Government in March.
Simpson said there was downside risk from de-rating of the company's premium multiple now that it was effectively takeover proof.
Around 50,000 shareholders had seen the share price fall from a high of over $3.40 at the peak of takeover talk in July last year to below $1.80c a year later. This morning it will open on $2.02.
