Christchurch Airport reports FY21 net profit

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Christchurch Airport has reported net profit after tax (NPAT), including underlying operating profit and revaluations of investment property on its Christchurch Campus, of NZ$38.7 million for FY21, off total income of NZ$189.5 million. This compares to the prior year (FY20) NPAT of $46.7 million from total income of NZ$179.3 million.

Total passenger numbers for FY21 were 3.7 million, compared to FY20 at 5.2 million (circa 7 million pre-pandemic). Domestic passengers reduced six per cent year on year, international passengers reduced 95 percent with borders largely closed for the year. FY21 underlying operating profit after tax (and before property revaluations on the Christchurch campus) was NZ$7.5 million.

“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 NPAT and return our balance sheet to its pre covid state during FY21”, says 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 NZ$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,” said 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 about NZ$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 percent. 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. 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,” said 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.”

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