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Auckland International Airport Ltd reports profit up 17%

Auckland International Airport Ltd (ASX: AIA) reported its result for the six months to 31 December 2017 today.

The airport operator’s main source of business is Auckland Airport but it also has stakes in Queenstown Airport and a couple of North Queensland Airports. It’s looking to offload the Queensland Airports stake.

Here are some of the highlights for the half-year in New Zealand dollars, compared to the prior corresponding period:

  • Income up 6.9% to $332 million
  • Earnings before interest, tax, depreciation, amortisation and investments in associates (EBITDAFI) up 6% to $250.1 million
  • Earnings per share (EPS) up 16.6% to 13.89 cents
  • ‘Underlying’ EPS up 7.3% to 11.14 cents
  • Dividend up 7.5% to 10.75 cents per share

Auckland Airport said that total passengers were up 6.4% to 10 million, which was a good portion of the profit increase.

However, Auckland Airport is also making the most of its amenities and investments too. Retail income increased by 10.2% to $88.9 million, investment property rental income increased by 16.3% to $37.8 million and car park income increased by 8.7% to $31.4 million.

Parking revenue increased so strongly because around 1,000 extra spaces were built in the first half of FY18.

During the six months one new airline and four new routes were added. It opened Gate 17 on Pier B, increasing the pier’s capacity by 50%. It also increased the mobile self-service check-in kiosk capacity by 33% and international check-in counter capacity by 15%.

The airport company said that the outlook for international passenger growth was good with increased capacity to Pacific Islands, Honolulu and South Asian routes.

Foolish takeaway

I was pleased but not too surprised by this result as New Zealand is going through the same tourist boom as Australia is, with the airport being one of the biggest beneficiaries. The share price may suffer in the near future due to interest rises but it’s firmly on my watchlist.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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