Full Year 2026 Auckland International Airport Ltd Earnings Call Transcript
Key Points
- Total passenger movements increased nearly 2% to over 19 million, with cargo up 3%, showing resilient demand.
- Improved processing times: international departure median times down 15.6% and domestic down 7% year-on-year, with a 27% reduction since FY23.
- Customer satisfaction reached 83.5% for the year, reflecting ongoing improvements.
- Revenue grew 3% to $1,036 million, with normalized EBITDAFI up 6% year-on-year.
- Strong infrastructure progress: $1 billion of assets commissioned, terminal integration 53% complete, and $700 million spent on the program.
- Car parking revenue up 9% and investment property rental income up 5%, showing commercial strength.
- Sustainability achievements: 75% reduction in Scope 1 and 2 emissions versus 2019 baseline, and 12% of electricity from solar.
- Balance sheet remains strong with FFO to net debt at 16.9%, well above the A- hurdle, and liquidity increased to $1.5 billion.
- Positive outlook for FY27 with international capacity up 4.3% for Northern Winter '26, and new routes from airlines like Starlux and Air New Zealand.
- Dividend maintained at $0.1325 per share, with a payout ratio of 73%.
- Underlying profit after tax fell 0.5% to $309 million, impacted by geopolitical instability and fuel price spikes in the second half.
- Retail income declined 4% due to duty-free redevelopment disruption and a shift to lower-margin categories.
- Regional passenger numbers dropped 4% year-on-year, with seat capacity down 5% and 18% below 2019 levels.
- Operating expenses grew 3%, including $5.9 million in fixed asset write-offs, and headcount increased 11%.
- Depreciation rose 20% to $241 million, reflecting new assets and accelerated depreciation on airfield assets.
- Interest income fell $9.2 million due to deployment of equity raise proceeds, reducing cash balances.
- Regulatory uncertainty: Commerce Commission's draft decision on cost of capital proposes a third material change in three years, creating risk for investors.
- FY27 guidance of $290-$330 million is wide, reflecting ongoing capacity constraints and geopolitical risks.
- Domestic capacity is expected to lag international recovery, with continued challenges in the regional market.
- The purchase of 82 hectares of land for future runway adds cost of carry, with no immediate return.
Good day, and thank you for standing by. Welcome to Auckland Airport Annual Results 2026. (Operator Instructions) Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Carrie Hurihanganui, CEO. Please go ahead.
[Foreign Language] Welcome, and good morning. With me today is our Chief Financial Officer, Stewart Reynolds, and we are pleased to be able to share financial results for the 12 months until June 30, '26. Overall, the year is one of steady performance amid global headwinds.
We have seen resilient demand for travel to and from New Zealand as far as -- from an underlying perspective, and we did see strong momentum in key international and domestic markets in the first half but certainly proved to be a more challenging second half due to increasing geopolitical instability most notably the events in the Middle East. The year did see a lot of uplift in overall passenger numbers.
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