IRELAND. Aer Rianta International (ARI) made profits after tax and minority interests of €11 million last year, a decline from €24 million in 2017, according to newly released results.
Profit after tax including non-controlling interests were €13 million, from €30 million in 2017.
Profits at ARI declined due to higher concession fees after the company retained key contracts in Beirut and Oman airports following tenders; the impact of a restructuring programme at Larnaca and Paphos airports and continued investment in ARI’s strategic development, said the retailer.
ARI had managed turnover of €1.1 billion in 2018, which was a 4% increase on 2017. Turnover increased by 7% on a like-for-like currency basis.
The financial results for ARI’s overseas businesses, which includes ARI’s share of profits from Düsseldorf Airport, are reported as part of daa group’s results, which were issued today. The ARI figure does not include the performance of ARI’s Irish operations at Dublin and Cork airports.
In Ireland, total sales at Dublin and Cork airports, including retail and food & beverage sales by concessionaires, increased to a record €331 million in 2018.
Passenger numbers increased again at Dublin and Cork airports during the year and ARI continued to invest in a major upgrade of its stores in Terminal 2 at Dublin Airport. daa’s Annual Report does not provide separate profit figures for ARI’s operations in Ireland, which are incorporated in the overall performance of the group.
“ARI had a challenging year in 2018 in profit terms, but we are continuing to invest in our stores and our people and are seeking new markets to expand our business,” said ARI Chief Executive Ray Hernan.
“We will continue to seek out opportunities to expand our airport footprint and leverage our position in the Middle East where we are the largest multi-site retail operator.
“We are excited by the announcement of the inaugural flight from Abu Dhabi Airport’s new Midfield Terminal this December where ARI Middle East will operate the P&C, sunglasses and jewellery outlets. The new terminal in Bahrain is also scheduled to open later this year and we are delighted by the potential this will provide for our business, after recently negotiating a ten-year extension to our existing contract.”
Hernan said that this year “will also see the launch of a major new e-commerce platform that is regarded by ARI’s brand partners as best in class.” Ireland will be the first country to launch followed by New Zealand, Cyprus and Canada. “The enhanced omnichannel capability will enable us to more effectively meet our customers’ expectations and provide an effective and targeted way to communicate with prospective customers,” he added.
“ARI’s programme of multi-million euro refurbishments will continue, the most significant of which are at T2, Dublin Airport, and also Larnaca in Cyprus, where some 7,000sq m of retail and F&B will be refurbished.”
In Cyprus, the positive impact of passenger volume growth of 7% at both Larnaca and Paphos airports was offset by declining passenger average spends from the key Russian market. As a result, the sales performance was broadly flat year-on-year.
ARI’s joint venture operations at Delhi International Airport, in which it holds a 33.1% stake, had another record year, with turnover almost 15% above 2017. A new arrivals store opened during the year and the departures outlet is currently being upgraded.
ARI’s retail operations in Canada and Auckland had a strong sales performance in 2018. Canada sales increased by 7% and Auckland sales increased by 11%. Auckland benefitted from a major investment in the new flagship departures store, which was completed in December 2017.
Last year ARI signed formal agreements to enter new markets in Indonesia and Saudi Arabia. It has a stake in a retail operation at Terminal 3 of Jakarta’s Soekarno-Hatta International Airport and is also providing management support services to the duty paid operation in Terminal 5 at King Khalid International Airport, Riyadh, Saudi Arabia.
Passenger numbers at Düsseldorf Airport declined by 1% to 24.3 million last year due mainly to the fallout of the 2017 collapse of Air Berlin, but have returned to growth this year.
Click here to read an interview with ARI Chief Executive Ray Hernan in The Moodie Davitt Report, which was his first since taking the job in August 2018.
