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Airports Company South Africa SOC Ltd - Annual Financial Results

Release Date: 29/08/2014 16:50
Code(s): AIR01 AIR02 AIRL01 AIR03 AIR04 AIR05     PDF:  
Wrap Text
Annual Financial Results

AIRPORTS COMPANY SOUTH AFRICA SOC LIMITED
FINANCIAL STATEMENTS FOR YEAR ENDED 31 MARCH 2014

DATE: 29 AUGUST 2014

Airports Company South Africa advances strategy to boost non-aeronautical revenue and strengthen
strategic stakeholder partnerships

Highlights: Financial year ended 31 March 2014


    - Operating profit rises 7,1 percent to R3,2 billion
    - International air traffic increases by four percent
    - Profit after tax of R1,7 billion
    - Total assets remained stable and closed the year at R27,9 billion
    - Total liabilities decreased by 10,8 percent to R15,3 billion
    - Continued with the implementation of the „win-win? stakeholder management strategy.

Johannesburg, 29 August 2014 - Airports Company South Africa delivered a sound financial and operational
performance and ensured that both funding and borrowing were well managed in the year ended 31 March
2014.

During the period under review, Airports Company South Africa posted a 7,1 percent increase in operating profit
to R3,2 billion. This was mainly attributable to the company having successfully met 94 percent of its
predetermined objectives and showed a significant improvement from the prior year. The group spent R928
million on capital projects that extended the life of its infrastructure, which is a strategic business imperative.

Speaking at the annual financial results presentation, Airports Company South Africa?s Chief Executive Officer,
Bongani Maseko, said, “At the heart of our blueprint is the vision of being a world-leading airport business. As
we strive towards this goal, we are aware that we operate in a dynamic macro-economic environment. For
example, factors such as changes in real gross domestic product (GDP), affordability of future borrowings and
the sovereign rating on the cost of capital are strategic issues that we monitor from a business continuity point
of view. The group continues to build an efficient customer-centric business by forging win-win partnerships with
all of its stakeholders.

“Revenue growth at our airports, which include O.R. Tambo International, Cape Town International and King
Shaka International, improved by seven percent compared to the 2013 performance, with growth in
international passengers and aircraft landings contributing notably to the aeronautical revenue performance.
Although air travel continued to develop, the global economic downturn still saw the affordability of air travel
influence demand,” Maseko said.

The company continues to be resilient, despite sluggish economic growth, by efficiently utilising existing
infrastructure to enhance efficiency ratios and profitability.

Another key highlight of the year was improving from a Level 3 to a Level 2 Broad-Based Black Economic
Empowerment (B-BBEE) rating on the back of significant gains in employment equity and preferential
procurement. The group created 20, 977 job opportunities, which has shown a three percent increase from the
2013 performance and increased socio-economic development spend from R58,5 million (2013) to R100 million
in 2014.

Maseko added, “Progress we have made during the year can also be attributed to playing a role in propelling
our global aspirations. We are currently engaging with airports in Africa and beyond to share our technical
expertise and knowledge to help develop aeronautical infrastructure through the transfer of skills and human
resource capabilities.”

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In line with Airports Company South Africa?s ongoing focus on expansion into emerging markets, the group recently
signed a memorandum of understanding with Ghana Airports Company Limited to provide advisory and technical
consultancy services on all airport-related matters in Ghana.

Going forward, Airports Company South Africa plans to:
   - Conclude the filling of positions at executive level
   - Finalise the review of the operating model
   - Continue to engage its stakeholders to ensure that relationships are enhanced
   - Invest R7,7 billion in capital expenditure in financial years 2015 to 2017.

Financial highlights in more depth

Presenting at the group?s financial results, Airports Company South Africa?s Chief Financial Officer, Maureen
Manyama-Matome said, “Aeronautical revenue grew to R4,6 billion and showed a year-on-year increase of
seven percent, which is attributable, in part, to a six percent increase in international aircraft landings and a 5,5
percent tariff increase for the year under review. A total number of 17,4 million passengers departed from South
African airports in the period. International air traffic posted an encouraging four percent and six percent
increase in passengers and landings respectively. Domestic aircraft landings, however, were 0,9 percent lower:
a reflection of depressed local economic conditions.”

Non-aeronautical revenue amounted to R2,6 billion and showed an eight percent year-on-year growth. This was
primarily driven by growth in international traffic, which affected the retail concessionaire revenues positively.
Retail revenue grew 17 percent as a result of guaranteed annual escalation from ongoing leases and higher
turnover-related rentals from an increase in international departing passengers.

The above demonstrates that the company continues to provide solid financial performance despite the current
challenging economic environment, with increasing focus to grow non-aeronautical revenue.

Manyama-Matome said that the group?s balance sheet remained strong and well capitalised, with total assets at
R27,9 billion. Gross debt declined to R12,9 billion (2013: R14,7 billion) due to the de-leveraging process that
began in the 2013 financial year, when debt of R2,1 billion was redeemed. A total of R1,9 billion of debt was
repaid in the period under review. The 2015 to 2017 plan is to invest R7,7 billion in capital expenditure,
including investment requirements based on industry demand. Cash carried over, plus cash generated from
operations, will fund 70 percent of the group's capital expenditure programme and the remaining 30 percent will
be funded through various debt instruments.

Airports Company South Africa remains on course to deliver airport infrastructure that is mapped against South
Africa's future growth and expansion requirements. The group?s estimated contribution to the country's GDP, on
an average annual basis, was 0,13 percent from 2008 to 2011. Future expansion plans up to 2023 are
expected to create 330 000 additional job opportunities, which may add up to as much as 0,7 percent to GDP
on an annual basis.

“The viability of our business as a forward-thinking company contributes to value creation and operational
efficiencies for the benefit of all our stakeholders. We remain committed to robust engagement with our multi-
faceted stakeholder network in order to drive sustainable economic gains,” concluded Manyama-Matome.

For more detailed information on the financial results, visit www.airports.co.za/home.asp?pid=3726

Debt Sponsor: SBSA        Contact: Armine Schaefer +27 11 721 8106

ENDS


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_______________________________________________________________________________________

For more information, please contact:
Unathi Batyashe-Fillis
Airports Company South Africa’s Group Spokesperson
Direct: +27 (0) 11 921 6087
Cell: +27 (0) 79 882 7307
Email: unathi.batyashe-fillis@airports.co.za




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