Wellington Airport keeps in regulator’s range while lifting earnings 44%

Steve Sanderson, Wellington International Airport Chief Executive
Infratil 12-month price history (NZX.com)

Wellington International Airport, which is two thirds owned by Infratil [NZX: IFT], boosted full-year profit by 44 percent while keeping returns within the range prescribed by regulations.

Net profit for the year ending March 31 was $23.5 million, up from $16.2 million a year earlier, the airport said in a statement. Sales rose 4.4 percent to $110.9 million, while its return on aeronautical assets was 6.2 percent, below the Commerce Commission's 8 percent limit.

Airports are required to disclose price setting methodology, financial statements and business plans to the regulator, as well as keeping returns under 8 percent to limit excessive profits. The Commerce Commission and Wellington Airport have been at odds about how this return is calculated.

The airport is continuing talks with airlines over changes to its runway and terminal services. Air New Zealand has accused the airport of price gouging, after the national carrier last year flagged a $200 million lift in landing fees over the coming five years.

Earnings from its landing and terminal charges rose 5.3 percent to $65.9 million in the year as it passed the 750,000 international passenger mark for the first time. Domestic passenger growth rose 1 percent in the year, the airport said, without being more specific.

Property rent and lease income gained 4 percent to $11.3 million. Its retail and trading activities unit lifted 2.8 percent to $33.7 million.

Over the next five years the airport is planning to spend $250 million on a terminal expansion, hotel, carpark as well as moving the fire station and a noise mitigation programme for neighbouring residents.

Wellington Airport's NZX-listed bonds, which pay annual interest of 6.25 percent and mature in May 2021, were unchanged at $101.876 per $100 face amount at a yield of 5.95 percent, according to NZX data. The airport listed the bonds in a $75 million offer last October, after having earlier raised $50 million in bonds from institutional investors in June.

Shares in Infratil were unchanged at $2.40.

(BusinessDesk)

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