Tuesday 22 August 2017 by Mary Anne Low Company updates

Sydney Airport 1H17 results – solid performance driven by international passenger growth

A summary of 1H17 results:


​Source: Sydney Airport, FIIG Securities

Results summary:

  • Total revenue was up 7.9% per corresponding period (pcp) to AUD710.5m, mostly attributable to international passenger growth of 7.7%, yield improvements in passenger related business segments of aeronautical (+8% pcp) and retail (+14.3% pcp), and returns on capital investment in aviation infrastructure
  • Although the total number of passengers grew by 3.6% to 21m passengers during 1H17, this figure was lower than the 6.5% growth achieved pcp. During 1H17, international passengers continue to record high single digit growth – albeit at a slower rate of 7.7% (compared to 8.9% in 1H16). Inbound international passengers grew 10% pcp, with strong growth from all regions particularly Middle East and Asia. On the other hand, passenger growth in the domestic business remain subdued and slowed to 1.3% compared to 5.3% pcp
  • Notwithstanding higher operating expenses of AUD136.6m (+8.7% pcp) – mainly driven by an increase of 21.9% pcp in higher electricity contract costs – EBITDA (excluding Western Sydney Airport project costs expensed) increased 7.7% pcp to AUD577.6m
  • Both cash flow cover ratio and net debt/EBITDA metrics (as at 30 June 2017) continued to improve, mainly due to higher earnings generation. The airport maintained its strong liquidity position with AUD1.0bn of available undrawn facilities
  • Net operating receipts (excluding Western Sydney Airport project costs expensed) increased by 15% to AUD382.8m, which supported an increase in the airport’s FY17 distribution guidance to 34.5 cents per stapled security (previously 33.5 cents)

Outlook

Sydney Airport remains focused on achieving its strategic, operational and financial objectives:-

  • To deliver world class facilities and operations for airlines and excellent customer service and experience
  • Reaffirmed its capital expenditure guidance of AUD1.3bn for the 2017-2021 period

A link to the results is available here.