The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is in the green today. At the time of writing, shares in Australia's busiest airport are trading for $5.85 – up 1.39%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is currently sitting 0.14% higher.
The company comes into focus as it holds its 2021 annual general meeting (AGM) today.
Let's take a closer look at today's update.
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What's affecting the Sydney Airport share price
Chair's address
In the first of two presentations to shareholders, Sydney Airport chair, Trevor Gerber, talked about the challenges the airport faced in the wake of the COVID-19 pandemic and outlined some of its plans for the future.
Gerber revealed Sydney Airport is aiming to become a net-zero carbon emitter by 2030. Net-zero means that any carbon emissions are offset by other means, which differs from zero-carbon emissions. The federal government considers both direct and indirect emissions relevant when trying to achieve net-zero emissions.
According to Gerber, 2020 was a tale of contrasts. The first quarter of the calendar year was strong for the company. Passenger traffic was comparable to the previous year before plunging to 25% passenger levels compared to 2019.
In 2020, revenue was down 51% to $803.7 million, according to the chair. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 62% $508.1 million. Most astonishingly, net operating receipts fell a mammoth 95% to $45.5 million. Gerber revealed, unsurprisingly, Sydney Airport would not pay a dividend at the end of the financial year.
Despite the lack of dividend payment, the Sydney Airport share price is rising in late morning trade.
Also in 2020, Sydney Airport undertook extreme measures to "protect the Airport's balance sheet," as Gerber put it.
The company secured an additional $850 million bank facility and raised $2 billion via an equity raise in 2020. Although not stated by Gerber today, in 2020, total expenses before depreciation and amortisation fell by 41% in 2020 to $291.6 million.
No guidance was issued for the remainder of the calendar year.
CEO's address
In the second presentation to shareholders, CEO Geoff Culbert expanded on the talking points of the chair.
He called 2020 "the toughest year in the history of Sydney Airport." Revenue in its airplane, carparking and ground transportation businesses collapsed by 70% on 2019. Retail revenue's fall was not further behind. Culbert revealed income from that business segment was 63.5% lower compared to 2019. Furthermore, 25% of Sydney Airport's workforce was made redundant in the third quarter of 2020, Culbert said.
Looking forward, Culbert said there was "pent-up demand" evident in domestic travel numbers. When state borders were open, domestic travel surged before falling when shut again. Passenger numbers surged again when borders were reopened, especially between Queensland and Victoria.
International travel numbers were down 97% on 2019 but the new trans-Tasman bubble between Australia and New Zealand is "an obvious bright spot" according to Culbert. He added its effects have been immaterial so far and that "it's still early days." Furthermore, Culbert said the company believes travel between Australia and New Zealand will continue to pick up over the course of 2021, especially heading into the winter school holidays.
The CEO added this optimism is reflected by the 96% occupancy rate of its retail stores. He concludes from this figure that retail partners "share [its] view on the long-term fundamentals of Sydney Airport." Investors seemingly agree, judging by today's rise in the Sydney Airport share price.
Finally, Mr Culbert called on the government to increase the speed of the vaccine rollout.
"The faster we get the country vaccinated, the earlier we can talk about opening the border. It's as simple as that," he said.
Sydney Airport share price snapshot
Over the past 12 months, the Sydney Airport share price has increased by 7.33%. It has still, however, not fully recovered from the impacts of the pandemic. Sydney Airport shares are around 27% lower when compared to their closing price on 24 February 2020.
Sydney Airport has a market capitalisation of $15.7 billion.
