The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has come under pressure on Monday morning following the release of a coronavirus update.
At the time of writing the airport operator's shares are down 7% to $4.52.
What did Sydney Airport announce?
This morning Sydney Airport decided to release an update in response to recent announcements by the Federal and State Governments and airlines including Qantas Airways Limited (ASX: QAN) and Virgin Australia Holdings Ltd (ASX: VAH).
On Sunday the prime minister indicated that he expects Australians to halt all non-essential travel and a number of states announced the closing of their borders. This follows the closure of the Australian border last week.
According to the release, the company is now working through the exact scheduling impacts on Sydney Airport with its airline partners, but it anticipates and is planning for a significant but temporary reduction in international and domestic traffic.
Balance sheet strength.
Based on the information it has available to it at present, management is confident in its balance sheet and liquidity position.
It notes that its average debt maturity has a tenor of over 6 years. It also has unrestricted cash of over $370 million and $1 billion of available undrawn bank facilities from more than 10 domestic and large global banks.
In addition, it has approximately $600 million of new USPP bond market debt, which is due to be funded in June 2020.
In total this will provide the airport operator with approximately $2 billion of available funds.
These funding sources more than cover the approximate $1.3 billion of expiring debt over the next 12 months. The next maturity after these 12 months is $200 million and due in November 2021.
Capital expenditure review.
Management advised that it is in the process of reviewing its entire capital expenditure program for 2020. The objective of this is only continuing with critical projects and deferring less critical projects until further clarity is gained regarding the persistence of the current travel impacts.
As such, it no longer expects to spend its previous forecast of between $350 million to $450 million in 2020.
No guidance was provided in respect to its dividend plans for 2020.
