IRELAND. Dublin Airport Authority (DAA) today reported profits from normal trading activities of €69.5 million for the year ending December 31, 2006, an increase of +39% compared with the previous year.
Overseas airport retailing arm Aer Rianta International (ARI), a DAA subsidiary, enjoyed another strong year. The profit contribution from ARI’s combined interests, including exceptional profits from the disposal of its shares in Hamburg Airport, increased by +12% to €19.5 million.
ARI and its equal joint venture partner, Macquarie Airports Group, recently announced provisional agreement to sell their combined 48% shareholding in Birmingham International Airport in the UK for £420 million to a consortium comprising Canadian and Australian institutional investors. The agreement, which is subject to a number of complex contractual and pre-emption arrangements, is unlikely to be completed until the end of the year.
Overall DAA profits after exceptional items amounted to €166 million. The exceptional items, with a combined net value of €96.5 million, comprised the after tax profits arising from the sale of the Great Southern Hotels Group (GSH) of €125 million and of the company’s 3% shareholding in Hamburg (€3 million) less the after tax cost of a restructuring plan at Shannon Airport (€31.5 million). Commercial revenues now account for 50% of group turnover, or €294 million in the year, said the DAA.
Combined passenger numbers at Dublin, Shannon and Cork Airports rose by +14% last year to 27.8 million. This represented the highest percentage increase for almost 20 years, and from a much higher base. Passenger numbers at Dublin Airport climbed by 2.7 million to 21.2 million, the highest level of growth at any major airport worldwide. Shannon and Cork also achieved record passenger volumes, each rising by just over +10% to 3.6 million and 3 million respectively.
Supported by higher passenger throughput, all key measures of profitability continued to move in a positive direction during 2006 including Group EBITDA (earnings before interest, taxation, depreciation and amortisation), which rose by €34 million to €145 million.
DAA Chief Executive Declan Collier (pictured) said the company had strengthened its financial position through a combination of prudent management of costs, the continued success of its commercial operations at home and abroad, the successful disposal of the loss-making GSH hotels group, and the optimisation, through sale, of the value in some of the company’s overseas airport assets. But he added that further growth in profitability from normal trading activities was vital to meet the scale of the financial challenge facing the company.
“The Group’s net debt levels fell sharply by the end of last year to €136 million due to the proceeds of the GSH sale. This borrowing position will soon change radically. As the Transforming Dublin Airport programme is rolled out, the Group’s net debt is expected to rise to more than €1 billion over the course of the next five years.
“In order for the DAA to fund this level of debt within objectively measured and prudent parameters of financial risk, Group EBITDA needs to increase significantly over the same time frame,” he added.
Collier re-affirmed that the State Airport’s Act stipulated that the separation of Dublin, Shannon and Cork Airports required the completion of airport business plans that would assure the Government that each had a viable, commercial future as a separate entity.
He said the recent restructuring agreement at Shannon Airport, involving 185 voluntary redundancies and significant changes in working arrangements for remaining employees, represented a positive first step towards Shannon’s financial viability.
The DAA is prepared to begin building Dublin Airport’s second passenger terminal (T2) and associated facilities, as soon as the company receives approval from the planning authorities, according to the Chairman of the DAA, Gary McGann.
“We have done everything possible to put ourselves in position to deliver the Transforming Dublin Airport programme and to satisfy Government policy requirements in this regard, as quickly as possible,” McGann said.
“Just two years after the publication of the Government’s Aviation Action Plan, 70% of the DAA’s first-phase, €1.2 billion investment programme at the airport is either under construction or at the planning stages. The first major element of the programme, Pier D, will open on schedule this autumn.”
MORE STORIES ON DUBLIN AIRPORT AUTHORITY AND ARI
Aer Rianta Retail Concessions Manager Albert Baker to retire in March – 20/02/07
Aer Rianta International sells stake in Hamburg Airport to Hochtief – 07/12/06
Aer Rianta International-Middle East managed turnover to top US$500 million in 2006 – 07/11/06
