Christchurch Airport ready for challenges ahead after announcing FY21 profit
New Zealand’s Christchurch Airport has reported net profit after tax of NZ$38.7 million for its 2021 financial year (FY21), off a total income of NZ$189.5 million.
The profit included underlying operating profit and revaluations of investment property on its Christchurch Campus and is slightly down on the NZ$46.7 million net profit after tax it recorded in the previous financial year.
Total passenger numbers for FY21 were 3.7 million, compared to FY20 at 5.2 million (circa seven million pre-pandemic). Domestic passengers reduced 6% year-on-year, international passengers reduced 95% with borders largely closed for the year.
“Coming out of the earthquakes we had to rethink our business and that work is a big part of being able to deliver both a positive operating profit, a respectable net profit after tax and return our balance sheet to its pre-COVID state during FY21”, said chief executive, Malcolm Johns.
Between 2014-19 Christchurch International Airport Limited (CIAL) recovered international passenger numbers, while also holding operating costs flat for five consecutive years. The majority of the circa $600 million in new capital expenditure invested during this period was directed towards supporting freight and logistics growth at Christchurch Airport and accessing new domestic revenue opportunities.
In 2017, CIAL equalised aviation charges between domestic and international passengers (meaning domestic and international passengers have been of equal value at Christchurch since then).
“The Board was clear following the earthquakes that it wanted to approach future major events with a philosophy of stakeholder equity, balancing the impacts and outcomes for customers, staff and shareholders. This will continue to be our approach, alongside taking an intergenerational view of our opportunities,” noted Board chair, Catherine Drayton.
“The Board has signalled an intention to pay a dividend and will make a final decision in October. Christchurch Airport has provided circa $35 million in customer and tenant support on its Christchurch campus so far during COVID-19.
“During FY21, CIAL achieved a world first Level 4 decarbonisation accreditation under the World Airports Council decarbonisation audit and is on track to reduce Scope 1 emissions by 90%. CIAL will be carbon neutral from FY21.”
CIAL has some debt facilities due to mature over the next financial year and the Board has an approved refinancing strategy in place. As a part of that, the airport company is considering issuing a NZD bond this financial year to replace existing debt and to maintain diversity of funding.
Before the current national lockdown, domestic passenger numbers were stronger than pre-pandemic and the company welcomes the government’s four step safe border opening plan. The airport states that it is, however, clear that vaccinations are now a critical part of the way forward.
Talent retention, continued activation of long-term strategy and maximising short-term domestic passenger recovery are key focuses for the company across the next financial year.
“We spent seven years building the business back better after the earthquakes,” added Johns. “COVID-19 means we must rise to that challenge again, but this time we’ll do so armed with the lessons of round one and from a stronger commercial position.”