Financial Summary

Financial summary

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Our total profit after tax for the year to 30 June 2017 was up 26.9% to $332.9 million, while underlying profit after tax increased 16.5% to $247.8 million.

Revenue increased 9.7% to $629.3 million. This was, in part, due to ongoing strong growth in aeronautical and investment property revenues. Operating expenses increased 8.8% to $156.2 million, in part due to operational resources and asset management and maintenance. Our earnings before interest expense, taxation, depreciation, fair value adjustments and investments in associates (EBITDAFI) increased 9.9% to $473.1 million.

Our total share of the underlying profit from associates was $14.9 million for the 2017 financial year, up 29.6%. The underlying profit share from Queenstown Airport was up 57.9% to $3 million and the share from the Novotel hotel, in which we increased our shareholding to 40% in February 2017, was up 58.8% to $2.7 million. Our underlying profit share from North Queensland Airports was up 16.5% to %9.2 million.

In the 2017 financial year we undertook a review of our 24.55% investment in North Queensland Airports (NQA). We believe NQA is a highly attractive asset and a great investment with a strong growth strategy and a new and highly capable management team. However, our review has confirmed that while NQA is a quality asset, it is not integral to our current business strategy.

The final dividend for the 2017 financial year is up 16.7% to 10.5 cents per share. It will be imputed at the company tax rate of 28% and paid on 20 October 2017 to shareholders who are on the register at the close of business on 6 October 2017. As a result, the total dividend for the 12 months to 30 June 2017 is up 17.1% to 20.5 cents per share. Our performance in the 2017 financial year means that underlying earnings per share have continued to increase, up 16.2% to 20.8 cents per share.

The reinstatement of our dividend reinvestment plan, to provide funding flexibility to support our investment in new infrastructure and growth, has been welcomed by many of our shareholders. The dividend reinvestment plan will again be in place for the 2017 financial year final dividend, enabling shareholders to elect to purchase Auckland Airport shares at a 2.5% discount to market price, instead of receiving the dividend as cash.

The table below shows how we reconcile reported profit after tax and underlying profit after tax for the full-year periods ended 30 June 2017 and 30 June 2016.

The following adjustments have been made to show underlying profit after tax for the 12-month periods ended 30 June 2017 and 30 June 2016:

  • We have reversed out the impact of revaluations of investment property and associates in the 2017 and 2016 financial years. An investor should monitor changes in investment property over time as a measure of growing value. However, a change in one particular period can be too short for the purposes of measuring performance. Changes between periods can be volatile and, consequently, will have an impact on comparisons. Finally, the revaluation is unrealised and, therefore, is not considered when determining dividends in accordance with the dividend policy.
  • We recognise gains or losses in the income statement arising from valuation movements in interest rate derivatives that are not hedge accounted and where the counter-party credit risk on derivatives has an impact on accounting hedging relationships. These gains or losses, as in the case of investment property, are unrealised and derivative gains or losses are expected to reverse out over their lives.
  • To be consistent, we have adjusted the revaluations of investment property and financial derivatives that are contained within the share of profit of associates in the 2017 and 2016 financial years.
  • We also allow for the taxation impacts of the above adjustments in the 2017 and 2016 financial years.
up$14.9m

–––– OUR TOTAL SHARE OF THE UNDERLYING PROFIT FROM ASSOCIATES WAS $14.9 MILLION FOR THE 2017 FINANCIAL YEAR, UP 29.6%.

up57.9%

–––– THE UNDERLYING PROFIT SHARE FROM QUEENSTOWN AIRPORT WAS UP 57.9% TO $3 MILLION.

Underlying profit

2017 2016
2017Reported profit
$M
Adjustments
$M
Underlying profit
$M
2016Reported profit
$M
Adjustments
$M
Underlying profit
$M
EBITDAFI per Income Statement 473.1 - 473.1 430.3 - 430.3
Share of profit of associates 19.4 (4.5) 14.9 (8.4) 19.9 11.5
Derivative fair value movement 2.5 (2.5) - (2.6) 2.6 -
Investment property fair value increases 91.9 (91.9) - 87.1 (87.1) -
Property, plant and equipment revaluation decrease - - - (16.5) 16.5 -
Depreciation (77.9) - (77.9) (73.0) - (73.0)
Interest expense and other finance costs (72.8) - (72.8) (79.1) - (79.1)
Other taxation expense (103.3) 13.8 (89.5) (75.4) (1.6) (77.0)
Profit after tax 332.9 (85.1) 247.8 262.4 (49.7) 212.7

Cash flows

Cash flow summary 2017
$M
2016
$M
Net cash inflow from operating activities 307.1 270.5
Net cash outflow applied to investing activities (337.3) (217.7)
Net cash inflow/(outflow) applied to financing activities 22.7 (38.7)
Net (decrease)/increase in cash held (7.5) 14.1

Financial performance

2017
$M
2016
$M
Income
Airfield income 119.6 103.4
Passenger services charge 174.3 154.9
Retail income 162.8 157.5
Rental income 84.9 74.7
Rates recoveries 5.6 5.4
Car park income 56.3 52.1
Interest income 2.3 1.7
Other income 23.5 24.2
Total income 629.3 573.9
Expenses
Staff 50.5 46.8
Asset management, maintenance and airport operations 55.6 49.1
Rates and insurance 12.2 11.5
Marketing and promotions 16.7 16.3
Professional services and levies 11.4 9.7
Other expenses 9.8 10.2
Total expenses 156.2 143.6
Earnings before interest expense, taxation, depreciation, fair value adjustments and investments in associates (EBITDAFI) 473.1 430.3
Share of (profit)/loss of associates 19.4 (8.4)
Derivative fair value increase/(decrease) 2.5 (2.6)
Property, plant and equipment fair value revaluation - (16.5)
Investment property fair value increase 91.9 87.1
Earnings before interest, taxation and depreciation (EBITDA) 586.9 489.9
Depreciation 77.9 73.0
Earnings before interest and taxation (EBIT) 509.0 416.9
Interest expense and other finance costs 72.8 79.1
Profit before taxation 436.2 337.8
Taxation expense 103.3 75.4
Profit after taxation attributable to owners of the parent 332.9 262.4

Financial position

As at 30 June 2017
$M
2016
$M
Non-current assets 6,399.5 6,038.6
Current assets 104.0 102.9
Total assets 6,503.5 6,141.5
Non-current liabilities 1,911.0 1,768.6
Current liabilities 563.5 492.2
Equity 4,029.0 3,880.7
Total equity and liabilities 6,503.5 6,141.5