Just yesterday, Sydney Airport Holdings Pty Ltd (ASX: SYD) released its FY21 first-half result to the ASX. The airport operator reported a decline in passenger numbers, after which its share price took a downward turn.
Meanwhile, Auckland International Airport Limited (ASX: AIA) also delivered its FY21 earnings on Thursday, announcing a full-year underlying loss. Its share price also edged slightly lower on the result for the day.
Comparing the financial numbers of two companies can give investors a clearer picture of how the industry is travelling.
It’s no secret that COVID-19 has impacted the aviation market like never before. However, all eyes are on how quickly the airport operators can reopen and rebound to pre-pandemic levels.
Below, we take a look at how Sydney Airport’s recent results stack up against Auckland Airport.
How has Australia’s biggest airport been performing?
Here’s a summary of the financial details that Sydney Airport posted for the 6 months ending 30 June 2021.
- Total revenue of $351 million, down 31.3% on the prior corresponding period;
- Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $210.8 million, down 29.8%;
- Loss after income tax expense of $97.4 million, up 81.7% (H1 HY20 $53.6 million loss); and
- No interim dividend declared.
The weak result came as 6 million total passengers were recorded for the period. This represented a 36.4% drop.
Yesterday, Sydney Airport shares fell 0.26% to end Friday’s session at $7.70.
How does this compare to the Auckland Airport earnings result?
Auckland Airport revealed its own numbers on Thursday, highlighting the struggling travel market. Here’s a recap on the company’s performance for the 12 months ending 30 June 2021:
- Total revenue of NZ$281.1 million (A$267.46 million), down 50.4% on the prior corresponding period;
- 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.
Auckland Airport recorded a stark fall in passenger numbers as a result of the COVID-19 border restrictions. In total, 6.4 million passengers walked through, reflecting a 58.5% drop on the previous financial year.
After dipping following the announcement on Thursday, the company’s shares bounced back yesterday. At the closing bell on Friday, Auckland Airport shares were up 2.69% to $6.87.
Comparing the two companies’ performance and financial reports, there are similarities in terms of total passengers, and cash earnings. Both Sydney Airport and Auckland Airport fell in revenue, and posted a loss while declaring no dividend.
Given the uncertain market, neither company dished up an earnings guidance for the foreseeable future.
However, the travel industry is forecast to fully recover in the coming years as COVID-19 vaccinations are rolled out.
Sydney Airport share price snapshot
It’s been a challenging 12 months for Sydney Airport shares. Although posting a 40% gain over the period, the company has faced severe disruptions within the travel industry.
In mid-July, the Sydney Airport share price rocketed following a takeover bid by a consortium of infrastructure investors. Since then, the airport operator has received a new offer from the Sydney Aviation Alliance, valuing its shares at $8.45 apiece.
Based on today’s price, Sydney Airport commands a market capitalisation of $21 billion, with approximately 2.7 billion shares on issue.