The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price will be one to watch closely at the end of the week. This comes as the company is due to report its FY21 half-year results tomorrow.
After Wednesday's market close, the airport operator's shares finished the day up 1.30% to $7.79.
Let's take a look at how the Sydney Airport share price tracked during the company's last earnings season.
What did Sydney Airport report for FY20?
Sydney Airport delivered its FY20 full-year result in late February, revealing worrying numbers across the board.
Here's a summary of the financial details that Sydney Airport posted for its last earnings season.
- Total revenue of $803.7 million, down 51% on the prior year (FY19 $1,639.6 million)
- Earnings before interest, tax, depreciation and amortisation (EBITDA) of $627.8 million, down 45% on the prior year (FY19 $1,145.5 million)
- Full year loss of income tax expense of $107.5 million, down 150% on the prior year (FY19 net profit after tax $215 million); and
- No full-year dividend declared, down 100% on the prior year (FY19 39 cents per share).
Following the release, Sydney Airport shares sunk from $6.20 on 24 February to as low as $5.76 in the days after. This represents a decline of around 7% for the blue chip company.
However, investors were purchasing the company's shares at bargain prices, sending them back up to pre-FY20 levels in early April.
What should investors look out for this earnings season?
Goldman Sachs analysts expect Sydney Airport to bounce back quickly when the country re-opens up.
The broker noted trans-Tasman volumes accounted for 14% of Sydney Airport's total international in the 2019 calendar year. However, the return of international passengers and a reduction in associated retail leave abatement will have a positive effect. More importantly, it allows for international retail and duty-free business to recommence.
Although currently in hibernation mode, the company is predicted to be a major beneficiary of Australia's COVID-19 vaccine strategy.
Key downside risks include a decline in passenger volumes, tightened regulatory processes, delayed border openings, slower and weaker demand recovery.
Sydney Airport share price snapshot
Up until the start of July 2021, Sydney Airport shares mostly travelled sideways, disrupted by constant COVID-19 lockdowns.
However, its shares rocketed following a takeover bid by a consortium of infrastructure investors in mid-July. Since then, the airport operator has received a new offer from the Sydney Aviation Alliance, valuing its shares at $8.45 apiece.
This has led the Sydney Airport share price to surge 20% year-to-date, and above 40% in the past 12 months.
On valuation grounds, Sydney Airport presides a market capitalisation of $21 billion, with approximately 2.7 billion shares on issue.
