The Auckland International Airport Ltd (ASX: AIA) share price has opened 1.3% lower this morning after reporting a 19.5% fall in net profit after tax (NPAT) in its full-year results.
What did AIA announce this morning?
Prior to market open, AIA said total passenger numbers increased by 2.8% on the prior corresponding period (pcp) to 21.1 million for the year ended 30 June 2019 (FY19).
As a result, AIA's operating earnings before interest, tax, depreciation, amortisation, fair value adjustments and investments in associates (EBITDAFI) surged 9.6% on pcp to $554.8 million for the year.
However, the company's statutory NPAT came in 19.5% lower at $523.5 million with a $254 million fair value decrease in AIA's investment property's the biggest contributing factor.
On an underlying basis, AIA reported underlying profit after tax up 4.4% to $274.7 million, while management also increased the final dividend by 2.3% on pcp to 11.25 cents per share.
What about operational results?
Of the 21.1 million passengers recorded for the year, international passengers comprised 11.5 million (up 2.2% on pcp) while domestic numbers reached 9.6 million (up 3.6% on pcp).
AIA is hoping to see the higher capex spend over the next five years translate into greater capacity and future cost efficiencies to boost revenues higher and continue to grow earnings.
Management also provided guidance for FY20 as it forecast an underlying profit after tax to once again land between $265 million to $275 million.
Foolish takeaway
Once the fair value change in investment properties is stripped out, this morning's AIA result doesn't look too bad on the surface.
Underlying earnings climbed higher, as did both international and domestic passenger numbers, and the company's capex spending remained within its FY19 guidance range.
This morning's drop in profit comes as flag carrier Air New Zealand Ltd (ASX: AIZ) reported a 31% drop in full-year profit ahead of the market open.
Air New Zealand cited higher fuel prices and a temporary increase in operating costs as key factors behind the declining profitability, with AIA's result indicating there is no shortage of traffic coming in and out of the country.
