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Posted By Pru

Profit lifts 50% at Christchurch Airport

Christchurch Airport (CIAL) has today announced increased net profit, revenue, and total declared dividends as a result of record passenger numbers and strong property growth.


Christchurch Airport’s Net Profit after Tax for FY17 grew $21.5 million (50%) to $64.6m, operating revenue grew $7.4 million (4.3%) and passenger numbers hit a new high of 6.57m (2016: 6.3m).


Outgoing Chairman David Mackenzie says the result is more good news for shareholders, with the dividend totalling $38.3m, equating to 66 cents per share (2016: $31m, 54cps).


'In line with the Board's policy of paying 90% of NPAT (excluding revaluation gains), the Board approved dividends of $34.8 million for the FY17 year, plus a special one-off dividend of $3.5 million to reflect the strong performance of the company. That means total dividends for FY17 are $38.3 million,” he says.


Mr Mackenzie says the uplift in the airport company’s property portfolio reflects excellent rental returns on property investments and the delivery of new developments to make efficient use of airport land.


He says passenger numbers of 6.57m through the airport’s terminals for the financial year show the company remains on track to achieve its target of 8.5m passengers per annum by 2025. Airline seats were 8.3 million in FY17 (up 7%) and passenger numbers were at 6.57 million (up 4.1%).


“Our focus on growing the Australian market has shown results with new trans-Tasman services from Qantas to Melbourne and Brisbane commencing just before Christmas last year. Emirates introduced a daily A380 service to Sydney and Dubai, making Christchurch the only New Zealand port to have a daily A380 service with Sydney, and also the smallest city on the planet to have a daily A380 service.


“Pleasingly this additional airline capacity, coupled with our joint campaign with Tourism New Zealand, saw Australian holiday arrivals into Christchurch grow nine per cent in the January to June 2017 period, continuing the strong recovery from this market after the earthquakes.

“We also saw strong seasonal capacity increases from China Southern Airlines and the strong load factors achieved saw the airline add a further 69% in capacity for the summer.


“In the property area, we have seen the completion of the new parcel logistics area with dedicated taxiway and apron to allow for more efficient transition of parcel freight into and out of Dakota Park. Parcel freight operators have experienced strong growth as e-commerce drives increased volumes and in FY17 CIAL completed new premises for Freightways and Courier Post. These new facilities will handle around 85% of all parcel freight into and out of the South Island.”


Mr Mackenzie said the Board was very focused on how new technology and changing consumer behaviours would shape its business going forward. The company has partnered with HMI Technologies to undertake New Zealand’s first autonomous electric vehicle trial and remained focused on establishing a basis to deploy electric autonomous vehicles for public transport on campus.


CIAL also executed an MOU with Alibaba Group to explore how New Zealand’s small businesses could achieve more value out of visitors from China and in the process drive greater parcel volumes into the air freight sector.


Appointed as Chair of CIAL in 2008, Mr Mackenzie will step down from that role at the company’s AGM in October, after nine years leading CIAL. During those nine years the airport has had to contend with the global financial crisis and the Canterbury earthquakes. Despite this the company has been able to build its business, construct and commission the new integrated terminal, establish new parking facilities, and substantially expand its property portfolio.


This has seen revenue double since 2008, profit rise substantially, and dividends to shareholders increase from $11.7m in 2008 to $38.3 million in 2017. This has driven shareholder value up $500 million, producing a total annualised return of 13.4% p.a.


Mr Mackenzie says he is happy with both the physical and fiscal transformation of the airport since 2008, and says he feels privileged to have been able to have played a role in the airport’s success. 


Mr Mackenzie’s successor is Catherine Drayton, a professional director and a current member of the CIAL board.