The Auckland International Airport Limited (ASX: AIA) share price is backtracking today following the airport operator's full-year FY21 results. The company announced its first full-year underlying loss in its 48-year history
At the time of writing, Auckland Airport shares are swapping hands for $6.69 a pop, down 1.47%.
Auckland Airport share price falters on expected negative result
The Auckland Airport share price slightly dropped after the company delivered its result for the 12 months ending 30 June 2021. Here are some of the key highlights:
- Total revenue of NZ$281.1 million (A$267.46 million), down 50.4% on the prior year
- Earnings before interest, tax, depreciation, fair value adjustments and investments in associates (EBITDAFI) of NZ$171.5 million (A$163.19 million), down 45% on the prior year
- Underlying net loss after tax of NZ$41.8 million (A$39.77 million), down 122.2% on the prior year; and
- No full-year dividend declared.
What happened in FY21 for Auckland Airport?
Auckland Airport recorded a stark fall in passenger numbers as a result of the current COVID-19 border restrictions. In total, 6.4 million passengers walked through, reflecting a 58.5% drop on the previous financial year. This consists of 5.8 million in domestic passenger numbers and 0.6 million in international passenger numbers.
In positive news, Auckland Airport's investment property division continued to perform strongly despite the impact of COVID-19. Investment property annual rent roll increased 12.5% to $117 million and the portfolio value grew 29% to $2.6 billion
The company announced its recovery strategy which involves scaling back operations to cut costs, and repaying outstanding debt. Currently, the airport operator is owing US$425 million in United States Private Placement (USPP) borrowings.
Furthermore, $700 million of debt facilities are due to mature between January and April 2022. Auckland Airport is conversing with the banks to renew its loans, with agreed interest cover being waived by lenders from January 2022.
Lastly, the company revealed plans to boost its retail business profile with the development of a 23,000 square meter outlet centre. Located on the north-eastern edge of the precinct, the fashion outlet will hold over 100 stores and food outlets.
What did management say?
Auckland Airport chair, Patrick Strange touched on the company's performance, saying:
It has been a year of disruption, resilience and adaptation for Auckland Airport as we worked through the pandemic to keep New Zealand safely connected to the world. Our results continue to reflect the serious impact that COVID-19 has had on our business and the wider aviation sector.
This week's national lockdown is a reminder that while there is still a great deal of uncertainty, the accelerating vaccination programme allows us to plan beyond the current phase of the pandemic with increasing confidence.
What's next for Auckland Airport?
Looking ahead, Auckland Airport will maintain to adopt more conservative planning assumptions than the International Air Travel Association (IATA). The latter is forecasting global travel to fully recover and exceed pre-pandemic levels in 2023.
The company believes the global aviation market will begin to gradually rebuild in 2022.
Due to the uncertainty in the market, Auckland Airport stated it is unable to provide underlying earnings guidance for FY22.