AIA – 1H21 Interim Results
Media Release | 18 February 2021
FY21 Interim Results: Continuing to manage
the impact of COVID-19, while preparing for
a safe recovery in trans-Tasman travel
Auckland Airport today announced its financial results for the six months to 31
December 2020.
Auckland Airport Chair Patrick Strange said: “The first half of the 2021 financial year
has continued to be a challenging time for both the company and the wider aviation
industry. While we were pleased to see domestic travel starting to rebuild, international
travel has remained at very low levels.
“The past six months have been a period of constant adjustment for Auckland Airport.
We have taken the opportunity to continue our programme to upgrade core
infrastructure during this period of low passenger numbers while also supporting the
New Zealand government, border agencies and airlines in the operation of a safe
border.
“The company has also been hard at work alongside industry, stakeholders and
medical experts to help establish a recovery path for New Zealand. One area of focus
has been implementing the trial of new testing technologies to improve access to rapid,
low-cost, and less invasive COVID-19 testing for our staff working at the border.
“We have also supported the development of a scientific risk-based model to safely
manage the risk of COVID-19 across the aviation system. Using a ‘traffic light’
approach to categorise countries using COVID-19 risk data, the model offers a method
that could be applied to safely re-establish regular and reliable air connections with low-
risk countries like Australia and certain Pacific nations when that approach is combined
with New Zealand’s domestic virus management strategy and ongoing controls at the
border.”
Mr Strange acknowledged the outstanding efforts of everyone who works at Auckland
Airport and noted that they have done a great job in responding to the quickly evolving
operating environment and the additional health and safety measures required as a
result of the pandemic.
Key performance data for the six months to 31 December 2020:
• Total number of passengers decreased to 2.8 million, down 73.4% on the previous
six-month period to 31 December 2019
• Domestic passengers decreased 44.6% to 2.6 million, and international passengers
(including transits) decreased 96.8% to 187,003
• Revenue was down 64.9% to 131.5 million
• Operating EBITDAFI was down 68.4% to $88.2 million
• Reported profit after tax was down 80.9% to $28.1 million
• Earnings per share was down 84.1% to 1.91 cents
• Net underlying loss after tax of $10.5 million
1
• Net underlying loss per share of 0.71 cents
1
• No interim dividend will be paid
Chief Executive Adrian Littlewood said the impact of the COVID-19-related travel
restrictions continued to be felt across the business in the first half of the 2021 financial
year.
“Recognising the ongoing impact that COVID-19 could have on Auckland Airport we
took significant steps to reposition the company. Core operating expenses were
reduced by $33 million, or 34%, in the six months to 30 December 2020 and we scaled-
back our significant infrastructure expansion programme while continuing to focus on
upgrading critical infrastructure assets such as runways and roads.
“Nevertheless, the lower number of passengers, especially international and transit
passengers, resulted in significant decreases to our key aeronautical, retail and
transport income. Revenue from our hotel operations and our investment in
Queenstown Airport also declined.
1
We recognise that EBITDAFI and underlying loss are non-GAAP measures. Please refer to the table at the end of
the media release for the reconciliation of reported profit after tax to underlying loss after tax.
“The partial recovery of New Zealand’s domestic travel market was a positive sign in
the first half of the 2021 financial year. Pleasingly, our domestic passenger numbers
have now recovered to around 65% of the pre-pandemic level. This was in part
achieved by working very closely with domestic airlines and other businesses operating
at the domestic terminal to ensure a high-quality and safe travel experience. It was a
real team effort across the airport system, and I want to acknowledge and thank
everyone involved in this critical work.
“The ongoing success of Auckland Airport’s commercial property business was a
highlight of the first half of the 2021 financial year. Property revenue increased 2.4% to
$47 million, driven by rental growth in the existing property portfolio and a part year
contribution from the large new Foodstuffs distribution centre.
“We have a number of new commercial developments currently under construction
which we expect to be valued at more than $223 million on completion with an
annualised rent roll of $116 million. Our commercial property portfolio is now valued at
approximately $2.4 billion, up 15% in the year to 31 December 2020. This is an
outstanding result that reflects both the underlying quality of our assets and the high-
quality approach of our commercial development team.”
Responding to COVID-19 in 1H21
Mr Littlewood said the unprecedented impact of COVID-19 called for a rapid response
to best protect Auckland Airport’s travellers, precinct workers, the wider community and
its business.
“Our procedures have been completely revised with new operational models to assist
travellers and meet new and evolving border requirements. We developed and
implemented a comprehensive process that included enhancing cleaning protocols,
managing physical distancing, staff protection, new passenger communications, and
reorganising the layout of our international terminal to allow for the separation of
different categories of passengers. We also worked closely with airlines to help
maintain New Zealand’s global freight connectivity. The government’s international air
freight capacity support scheme has also been an important facility to ensure New
Zealand remains connected to its international markets.
“We were pleased to be the first New Zealand airport to receive Airports Council
International’s Airport Health Accreditation – an endorsement of our COVID-19 health
and safety measures.
“Despite the impact of the COVID-19-related travel restrictions on the company
Auckland Airport was able to continue its support of projects within the local community,
many of which were also impacted by the pandemic. Auckland Airport also remained
committed to long term sustainability by developing a new 10-year strategy with new
targets to guide its activities in relation to diversity, health and safety, resource
consumption, and carbon.”
Positioning for the recovery from COVID-19
Throughout the response to COVID-19 we have constantly adjusted our approach to
ensure we are best placed to recover and manage through the ongoing uncertainty,
said Mr Littlewood.
“As we enter a second year of operating in a pandemic environment we continue to
look for opportunities to strengthen our health and safety response, particularly for
those at the front line, and help support the development of a path to safely restart two-
way connections with our closest neighbours in Australia and the Pacific Islands. Our
work in implementing new rapid saliva testing technology for staff and the proposal for
a safe model to re-open to low risk countries like Australia are examples and we will
continue that work with our colleagues in the aviation and travel industry.
“We have also been reworking our infrastructure development roadmap with airlines to
ensure our refreshed plan for developing airport infrastructure reflects the reality of a
post-pandemic recovery while serving the needs of our airline customers and the
travelling public.
“The low-volume of aeronautical activity has provided a unique opportunity to
accelerate select infrastructure upgrades. Most noticeably for visitors to the airport we
have continued with a major upgrade of the northern airport access road to include high
occupancy vehicle lanes, shared pedestrian and cycle paths, and new wayfinding
gantries. We’ve also successfully completed the replacement of more than 360
concrete slabs in the runway’s east and west touchdown zones and made progress on
an upgrade of the airside fuel network. In January 2021 we began a pavement upgrade
across the airfield’s taxiways and apron and restarted work on a new one-way exit road
system for the international terminal in line with our future terminal development plans.
“The momentum in our commercial property business continued with the completion of
the 84,000 square metre Foodstuffs warehouse and office and a 10,000 square metre
warehouse on Timberly Road. Construction also continued on the structures and
façades of the 5-star Te Arikinui Pullman Hotel and the 4-star Mercure Hotel with the fit-
out of both hotels scheduled for completion when market conditions improve. A $172
million future property development pipeline to accommodate clients such as EBOS
(Healthcare Logistics), Geodis Wilson, Hellmann, DHL and Interwaste will help
Auckland Airport’s property business continue to grow.”
Outlook
Mr Littlewood said: “We expect the timing of the recovery will remain uncertain in the
coming five months of the 2021 financial year. While we have already seen a partial
recovery of domestic travel and the opening of one-way quarantine free travel to
Australia, our recovery path is strongly linked to two-way quarantine free trans-Tasman
travel.
“Despite the ongoing level of uncertainty around the recovery of trans-Tasman and
wider international travel the company is providing underlying earnings guidance for the
2021 financial year of a loss after tax of between $35 million and $55 million.
“Although the government remains committed to restarting two-way trans-Tasman
travel, and we support this, for the purposes of this underlying earnings guidance we
have assumed there will be no material quarantine-free, two-way Tasman travel during
the remainder of the 2021 financial year. It also assumes no further lockdowns of an
extended duration during the period.
“Auckland Airport has a strong focus on investing in infrastructure to help position the
company for the safe and measured recovery in travel. The company is reducing its
capital expenditure guidance for the 2021 financial year to between $200 million and
$230 million and we continue to take a measured approach to capital expenditure due
to the current trading environment.”
The above guidance is subject to any material adverse events, significant one-off
expenses, non-cash fair value changes to property, and any deterioration due to global
market conditions or other unforeseeable circumstances.
ENDS
Note 1. Underlying profit / (loss) reconciliation
For the six months ended 31 December ($m)
2020 2019
Reported
profit
Adjustments Underlying
profit / (loss)
Reported
profit
Adjustments Underlying
profit / (loss)
EBITDAFI per Income Statement 88.2 - 88.2 279.2 - 279.2
Investment property fair value increase 29.8 (29.8) - 9.1 (9.1) -
Fixed asset impairment - 0.9 0.9 - - -
Reversal of fixed asset termination costs - (14.9) (14.9) - - -
Derivative fair value movement 0.8 (0.8) - (0.4) 0.4 -
Share of profit of associates and joint ventures 3.2 (0.1) 3.1 5.0 - 5.0
Depreciation (59.3) - (59.3) (55.4) - (55.4)
Interest expense and other finance costs (35.0) - (35.0) (34.7) - (34.7)
Taxation expense 0.4 6.1 6.5 (55.6) 1.4 (54.2)
Profit after tax 28.1 (38.6) (10.5) 147.2 (7.3) 139.9
We have made the following adjustments to show underlying profit / (loss) after tax for
the six months ended 31 December 2020 and 2019:
• we have reversed out the impact of revaluations of investment property. An investor
should monitor changes in investment property over time as a measure of growing
value. However, a change in one particular year is too short to measure long-term
performance. Changes between years can be volatile and, consequently, will impact
comparisons. Finally, the revaluation is unrealised and, therefore, is not considered
when determining dividends in accordance with the dividend policy;
• we have reversed out the impact of fixed asset project write-offs, impairments and
termination costs. In response to the COVID-19 outbreak, some capital expenditure
projects were abandoned and fully written off and others were suspended. Some of
these abandoned or suspended projects incurred contractor termination costs. The
abandonment or suspension of live capital expenditure projects is extremely rare
and is the direct consequence of COVID-19. These fixed asset write-off costs,
impairments and termination costs are not considered to be an element of the
group’s normal business activities and on this basis have been excluded from
underlying profit;
• we have also reversed out the impact of derivative fair value movements. These are
unrealised and relate to basis swaps that do not qualify for hedge accounting on
foreign exchange hedges, as well as any ineffective valuation movements in other
financial derivatives. The group holds its derivatives to maturity, so any fair value
movements are expected to reverse out over their remaining lives;
• we have adjusted the share of profit of associates and joint ventures to reverse out
the impacts on those profits from revaluations of investment property and financial
derivatives; and
• we have also reversed out the taxation impacts of the above movements in both six-
month periods.
For further information, please contact:
Media:
Helen Twose
Communications Manager
+64 27 254 0790
helen.twose@aucklandairport.co.nz
Investors:
Stewart Reynolds
Head of Strategy, Planning and Performance
+64 27 511 9632
stewart.reynolds@aucklandairport.co.nz
---
Interim Financial
Statements 2021
Contents
Financial statements 02
Notes and accounting policies 08
Shareholder information 24
Corporate directory 26
Interim Financial Statements 20211
Consolidated interim income statement
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
UnauditedUnaudited
6 months to
31 Dec 2020
6 months to
31 Dec 2019
Notes
$M$M
Income
Airfield income30.860.8
Passenger services charge9.591.1
Retail income7.0113.6
Rental income55.457.0
Rates recoveries3.83.8
Car park income12.534.3
Interest income3.10.7
Other income9.413.4
Total income
131.5374.7
Expenses
Staff521.030.6
Asset management, maintenance and airport operations24.542.5
Rates and insurance10.68.9
Marketing and promotions0.25.6
Professional services and levies1.52.8
Fixed asset impairment30.9-
Reversal of fixed asset termination costs3(14.9)-
Other expenses3.35.9
Reversal of expected credit losses(3.8)(0.8)
Total expenses
43.395.5
Earnings before interest expense, taxation, depreciation,
fair value adjustments and investments in associate and
joint ventures (EBITDAFI)
1
88.2279.2
Investment property fair value change1029.89.1
Derivative fair value change0.8(0.4)
Share of profit of associate and joint ventures73.25.0
Earnings before interest, taxation and depreciation (EBITDA)
1
122.0292.9
Depreciation59.355.4
Earnings before interest and taxation (EBIT)
1
62.7237.5
Interest expense and other finance costs535.034.7
Profit before taxation
427.7202.8
Taxation expense(0.4)55.6
Profit after taxation, attributable to the owners of the parent
28.1147.2
Earnings per share
CentsCents
Basic and diluted earnings per share1.9111.97
1 EBITDAFI, EBITDA and EBIT are non-GAAP measures.
THE FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS HAVE NOT BEEN AUDITED. THEY HAVE BEEN THE SUBJECT OF A REVIEW
BY THE AUDITORS PURSUANT TO NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 (REVISED) FOR THE SIX-MONTH PERIOD
TO 31 DECEMBER 2020 AND NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 FOR THE SIX-MONTH PERIOD TO 31 DECEMBER
2019. THE FULL-YEAR FINANCIAL STATEMENTS TO 30 JUNE 2020 HAVE BEEN AUDITED.
THE ACCOMPANYING NOTES FORM PART OF THESE FINANCIAL STATEMENTS.
Consolidated interim statement of comprehensive income
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
UnauditedUnaudited
6 months to
31 Dec 2020
6 months to
31 Dec 2019
$M$M
Profit for the period
28.1147.2
Other comprehensive income
Items that may be reclassified subsequently to the income statement:
Cash flow hedges:
Fair value gains/(losses) recognised in the cash flow hedge reserve14.40.4
Realised (gains)/losses transferred to the income statement(0.5)1.2
Tax effect of movements in the cash flow hedge reserve(3.9)(0.4)
Total cash flow hedge movement10.01.2
Movement in cost of hedging reserve(2.6)2.2
Tax effect of movement in cost of hedging reserve0.7(0.6)
Items that may be reclassified subsequently to the income statement
8.12.8
Total other comprehensive income
8.12.8
Total comprehensive income for the period, net of tax, attributable to
the owners of the parent
36.2150.0
THE FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS HAVE NOT BEEN AUDITED. THEY HAVE BEEN THE SUBJECT OF A REVIEW
BY THE AUDITORS PURSUANT TO NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 (REVISED) FOR THE SIX-MONTH PERIOD
TO 31 DECEMBER 2020 AND NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 FOR THE SIX-MONTH PERIOD TO 31 DECEMBER
2019. THE FULL-YEAR FINANCIAL STATEMENTS TO 30 JUNE 2020 HAVE BEEN AUDITED.
THE ACCOMPANYING NOTES FORM PART OF THESE FINANCIAL STATEMENTS.
Interim Financial Statements 20213
Consolidated interim statement of changes in equity
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
Issued and
paid-up
capital
Cancelled
share
reserve
Property, plant
and equipment
revaluation
reserve
Share-
based
payments
reserve
Cash flow
hedge
reserve
Cost of
hedging
reserve
Share of
reserves of
associate and joint
ventures
Retained
earningsTotal
Notes
$M$M$M$M$M$M$M$M$M
Six months ended 31 December 2020
(unaudited)
At 1 July 2020
1,678.6(609.2)4,333.71.6(100.7)(3.9)28.81,308.26,637.1
Profit for the period-------28.128.1
Other comprehensive income----10.0(1.9)--8.1
Total comprehensive income
----10.0(1.9)-28.136.2
Reclassification to retained earnings--(3.6)----3.6-
Shares issued110.6-------0.6
Long-term incentive plan---0.2----0.2
At 31 December 2020
1,679.2(609.2)4,330.11.8(90.7)(5.8)28.81,339.96,674.1
Six months ended 31 December 2019
(unaudited)
At 1 July 2019
468.2(609.2)4,968.81.4(67.1)(5.8)28.81,247.86,032.9
Profit for the period-------147.2147.2
Other comprehensive income----1.21.6--2.8
Total comprehensive income
----1.21.6-147.2150.0
Shares issued1132.2-------32.2
Dividend paid8-------(136.3)(136.3)
At 31 December 2019
500.4(609.2)4,968.81.4(65.9)(4.2)28.81,258.76,078.8
THE FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS HAVE NOT BEEN AUDITED. THEY HAVE BEEN THE SUBJECT OF A REVIEW
BY THE AUDITORS PURSUANT TO NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 (REVISED) FOR THE SIX-MONTH PERIOD
TO 31 DECEMBER 2020 AND NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 FOR THE SIX-MONTH PERIOD TO 31 DECEMBER
2019. THE FULL-YEAR FINANCIAL STATEMENTS TO 30 JUNE 2020 HAVE BEEN AUDITED.
THE ACCOMPANYING NOTES FORM PART OF THESE FINANCIAL STATEMENTS.
Issued and
paid-up
capital
Cancelled
share
reserve
Property, plant
and equipment
revaluation
reserve
Share-
based
payments
reserve
Cash flow
hedge
reserve
Cost of
hedging
reserve
Share of
reserves of
associate and joint
ventures
Retained
earningsTotal
Notes
$M$M$M$M$M$M$M$M$M
Six months ended 31 December 2020
(unaudited)
At 1 July 2020
1,678.6(609.2)4,333.71.6(100.7)(3.9)28.81,308.26,637.1
Profit for the period-------28.128.1
Other comprehensive income----10.0(1.9)--8.1
Total comprehensive income
----10.0(1.9)-28.136.2
Reclassification to retained earnings--(3.6)----3.6-
Shares issued110.6-------0.6
Long-term incentive plan---0.2----0.2
At 31 December 2020
1,679.2(609.2)4,330.11.8(90.7)(5.8)28.81,339.96,674.1
Six months ended 31 December 2019
(unaudited)
At 1 July 2019
468.2(609.2)4,968.81.4(67.1)(5.8)28.81,247.86,032.9
Profit for the period-------147.2147.2
Other comprehensive income----1.21.6--2.8
Total comprehensive income
----1.21.6-147.2150.0
Shares issued1132.2-------32.2
Dividend paid8-------(136.3)(136.3)
At 31 December 2019
500.4(609.2)4,968.81.4(65.9)(4.2)28.81,258.76,078.8
Interim Financial Statements 20215
Consolidated interim statement of financial position
AS AT 31 DECEMBER 2020
UnauditedAudited
As at
31 Dec 2020
As at
30 Jun 2020
Notes
$M$M
Non-current assets
Property, plant and equipment96,066.56,060.8
Investment properties102,094.02,042.7
Investment in associate and joint ventures7124.5114.7
Derivative financial instruments148.4230.5
8,433.48,448.7
Current assets
Cash and cash equivalents682.4765.3
Trade and other receivables48.746.2
Taxation receivable21.021.6
Derivative financial instruments12.115.4
764.2848.5
Total assets
9,197.69,297.2
Shareholders’ equity
Issued and paid-up capital111,679.21,678.6
Reserves3,655.03,650.3
Retained earnings1,339.91,308.2
6,674.16,637.1
Non-current liabilities
Term borrowings121,684.31,824.4
Derivative financial instruments119.3134.6
Deferred tax liability233.4231.7
Other term liabilities2.22.1
2,039.22,192.8
Current liabilities
Accounts payable and accruals92.7106.3
Derivative financial instruments4.93.0
Short-term borrowings12382.5320.8
Provisions4.237.2
484.3467.3
Total equity and liabilities
9,197.69,297.2
THE FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS HAVE NOT BEEN AUDITED. THEY HAVE BEEN THE SUBJECT OF A REVIEW
BY THE AUDITORS PURSUANT TO NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 (REVISED) FOR THE SIX-MONTH PERIOD
TO 31 DECEMBER 2020 AND NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 FOR THE SIX-MONTH PERIOD TO 31 DECEMBER
2019. THE FULL-YEAR FINANCIAL STATEMENTS TO 30 JUNE 2020 HAVE BEEN AUDITED.
THE ACCOMPANYING NOTES FORM PART OF THESE FINANCIAL STATEMENTS.
Consolidated interim cash flow statement
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
UnauditedUnaudited
6 months to
31 Dec 2020
6 months to
31 Dec 2019
Notes
$M$M
Cash flow from operating activities
Cash was provided from:
Receipts from customers133.8358.6
Interest received2.20.7
136.0359.3
Cash was applied to:
Payments to suppliers and employees(71.2)(99.7)
Income tax paid-(56.3)
Interest paid(33.7)(34.3)
(104.9)(190.3)
Net cash flow from operating activities
631.1169.0
Cash flow from investing activities
Cash was provided from:
Proceeds from sale of property, plant and equipment0.1-
Dividends from associate and joint ventures-8.9
0.18.9
Cash was applied to:
Purchase of property, plant and equipment(76.2)(120.9)
Interest paid – capitalised(3.6)(6.5)
Expenditure on investment properties(32.7)(92.8)
Investment in joint ventures(6.6)(15.4)
(119.1)(235.6)
Net cash flow applied to investing activities
(119.0)(226.7)
Cash flow from financing activities
Cash was provided from:
Increase in borrowings5.0290.0
5.0290.0
Cash was applied to:
Decrease in borrowings-(100.0)
Dividends paid8-(104.4)
-(204.4)
Net cash flow from financing activities
5.085.6
Net (decrease)/increase in cash held(82.9)27.9
Opening cash brought forward
765.337.3
Ending cash carried forward
682.465.2
THE FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS HAVE NOT BEEN AUDITED. THEY HAVE BEEN THE SUBJECT OF A REVIEW
BY THE AUDITORS PURSUANT TO NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 (REVISED) FOR THE SIX-MONTH PERIOD
TO 31 DECEMBER 2020 AND NEW ZEALAND STANDARD FOR REVIEW ENGAGEMENTS 2410 FOR THE SIX-MONTH PERIOD TO 31 DECEMBER
2019. THE FULL-YEAR FINANCIAL STATEMENTS TO 30 JUNE 2020 HAVE BEEN AUDITED.
THE ACCOMPANYING NOTES FORM PART OF THESE FINANCIAL STATEMENTS.
Interim Financial Statements 20217
1.
Corporate information
Auckland International Airport Limited (‘the
company’ or ‘Auckland Airport’) is a company
established under the Auckland Airport Act 1987
and was incorporated on 20 January 1988 under
the Companies Act 1955. The company was re-
registered under the Companies Act 1993 on 6 June
1997. The company is an FMC Reporting Entity
under Part 7 of the Financial Markets Conduct Act
2013.
The financial statements presented are for
Auckland Airport and its wholly owned subsidiaries,
joint ventures and an associate (‘the group’).
These interim financial statements were authorised
for issue in accordance with a resolution of the
directors on 18 February 2021.
2.
Basis of preparation and accounting policies
The interim financial statements have been prepared
in accordance with generally accepted accounting
practice in New Zealand and the requirements of the
Financial Markets Conduct Act 2013 and the Main
Board/Debt Market Listing Rules of NZX Limited.
The interim financial statements comply with New
Zealand Equivalent to International Accounting
Standards NZ IAS 34 and IAS 34 Interim Financial
Reporting.
Auckland Airport is designated as a profit-oriented
entity for financial reporting purposes.
These interim financial statements are not required
to and do not make disclosure of all of the
information required to be included in an annual
financial report. Accordingly, this report should be
read in conjunction with the financial statements and
related notes included in Auckland Airport’s
Financial Report for the year ended 30 June 2020.
The accounting policies set out in the 2020 Financial
Report have been applied consistently to all periods
presented in these interim financial statements.
There are no new or amended standards that are
issued but not yet effective that are expected to have
a material impact on the group.
These financial statements are presented in New
Zealand dollars and all values are rounded to the
nearest million dollars ($M) and one decimal point
unless otherwise indicated.
Notes and accounting policies
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
3.
Changes in key estimates and judgements
The financial position and performance of the group
continued to be affected by the COVID-19
pandemic during the period. The following key
estimates and judgements, arising from COVID-19,
were generated on the same basis as at 30 June
2020:
Abatements
The group continues to provide abatements to
retailers, aeronautical and property tenants
significantly affected by COVID-19. During the
period ended 31 December 2020, the group
recognised $97.8 million of abatments as negative
variable lease payments. These abatements were
consistent with expectations and were factored into
revaluations and impairment assessments at
30 June 2020.
Fixed asset write-offs, impairment and termination
costs
No fixed assets were written off during the period
ended 31 December 2020.
At 30 June 2020, the group recognised a
$39.7 million impairment of capital works in
progress. During the period ended 31 December
2020, the group recognised a further impairment of
$0.9 million.
The provision for contract termination costs as at
30 June 2020 was $36.3 million. The group
successfully concluded negotiations with most
contractors during the period ended 31 December
2020, resulting in $18.0 million being used in
settlements, $14.9 milllion being reversed to the
income statement and $3.4 million provisions
remaining at period end.
Provision for expected credit losses
The provision for expected credit losses as at
30 June 2020 was $7.6 million. During the period
ended 31 December 2020, the provision has
decreased by $3.8 million reflecting the recovery of
outstanding debt.
Fair value assessments of investment properties
The valuations of investment properties at 30 June
2020 were prepared on the basis of 'material
valuation uncertainty'. The group has assessed that,
as at 31 December 2020 there is no 'material
valuation uncertainty' for investment properties
(note 10).
Other balance sheet assessments
There have been no material changes in the
assessments of the following items disclosed in the
30 June 2020 financial statements:
•Impairment of associate and joint ventures (note
7); and
•Fair value assessments of property, plant and
equipment (note 9).
Interim Financial Statements 20219
4.
Segment information
(a) Identification of reportable segments
The group has identified its operating segments
based on the internal reports reviewed and used by
the chief executive, as the chief operating decision-
maker, in assessing performance and in determining
the allocation of resources.
The operating segments are identified by
management based on the nature of services
provided. Discrete financial information about each
of these operating segments is reported to the chief
executive at least monthly. The chief executive
assesses the performance of the operating
segments based on segment EBITDAFI. Interest
income and expenditure, taxation, depreciation, fair
value adjustments, and share of profits of associate
and joint ventures are not allocated to operating
segments as the group manages the cash position
and borrowings at a group level.
(b)
Types of services provided
Aeronautical
The aeronautical business provides services that
facilitate the movement of aircraft, passengers and
cargo and provides utility services that support the
airport. The aeronautical business also earns rental
revenue from space leased in facilities such as
terminals.
During the period ended 31 December 2020, New
Zealand's international border remained closed for
non-residents, significantly affecting airfield income
and passenger services charges. Further
information is available in the 2020 Financial Report.
Retail
The retail business provides services to the retailers
within the terminals and provides car parking
facilities for passengers, visitors and airport staff.
The above-mentioned travel restrictions continued
to affect retailers within the terminals and the group
provided $94.8 million of abatements to retailers
during the six-month period ended 31 December
2020. Refer to note 3 for further information.
Property
The property business earns rental revenue from
space leased on airport land outside the terminals
including cargo buildings, hangars, shops and other
stand-alone investment properties.
The group provided $2.8 million of rent abatements
to property tenants during the six-month period
ended 31 December 2020, but this was offset by
new tenancies, with no material impact on total
property rental revenue due to COVID-19 during the
period.
AeronauticalRetailPropertyTotal
$M$M$M$M
Six months ended 31 December 2020
(unaudited)
Total segment income52.521.951.7126.1
Total segment expenses18.75.38.432.4
Segment earnings before interest expense,
taxation, depreciation, fair value adjustments
and investments in associate and joint
ventures (EBITDAFI)
33.816.643.393.7
Six months ended 31 December 2019
(unaudited)
Total segment income167.3154.150.2371.6
Total segment expenses46.716.711.174.5
Segment earnings before interest expense,
taxation, depreciation, fair value adjustments
and investments in associate and joint
ventures (EBITDAFI)
120.6137.439.1297.1
Income reported above represents income generated from external customers. There was no inter-
segment income in the period (31 December 2019: nil).
Notes and accounting policies CONTINUED
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
(c) Reconciliation of segment EBITDAFI to income statement
UnauditedUnaudited
6 months to
31 Dec 2020
6 months to
31 Dec 2019
$M$M
Segment EBITDAFI
93.7297.1
Unallocated external operating income5.43.1
Unallocated external operating expenses(10.9)(21.0)
Total EBITDAFI as per income statement
88.2279.2
Investment property fair value increase29.89.1
Derivative fair value change0.8(0.4)
Share of profit of associate and joint ventures3.25.0
Depreciation(59.3)(55.4)
Interest expense and other finance costs(35.0)(34.7)
Profit before taxation
27.7202.8
The income included in unallocated external operating income consists mainly of interest from third-party
financial institutions and income from telecommunication and technology services provided to tenants. The
expenses included in unallocated external operating expenses consists mainly of corporate staff expenses
and corporate legal and consulting fees.
Interim Financial Statements 202111
5.
Profit for the period
UnauditedUnaudited
6 months to
31 Dec 2020
6 months to
31 Dec 2019
$M$M
Staff expenses comprise:
Salaries and wages24.531.4
Capitalised salaries and wages(2.8)(7.2)
Employee benefits(0.2)2.4
Share-based payment plans0.20.4
Defined contribution superannuation0.90.9
Government wage subsidy(2.2)-
Other staff costs0.62.7
21.030.6
Interest expense and other finance costs comprise:
Interest on bonds and related hedging instruments18.521.3
Interest on bank facilities and related hedging instruments9.76.8
Interest on USPP notes and related hedging instruments4.57.1
Interest on AMTN notes and related hedging instruments4.44.4
Interest on commercial paper and related hedging instruments1.51.6
38.641.2
Less capitalised borrowing costs(3.6)(6.5)
35.034.7
Interest rate for capitalised borrowings costs4.04%3.94%
As part of its response to COVID-19, the group reduced its workforce, affecting both employees involved
in operational activities and employees whose time is predominantly capitalised to capital expenditure
projects. Salaries and wages have previously been disclosed net of the capitalised amounts. To improve
transparency and illustrate the impact of fewer project oriented employees and less time capitalised to
projects, ‘capitalised salaries and wages’ has been disaggregated from ‘salaries and wages’ in both the
current and comparative periods.
The interest expense amounts disclosed in the table above are net of the impact of interest rate hedges.
The gross interest costs of bonds, bank facilities, USPP, AMTN and commercial paper, excluding the
impact of interest rate hedges, was $35.1 million for the period ended 31 December 2020 (31 December
2019: $41.0 million).
Notes and accounting policies
CONTINUED
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
6.
Reconciliation of profit after taxation with cash flow from operating
activities
UnauditedUnaudited
6 months to
31 Dec 2020
6 months to
31 Dec 2019
$M$M
Profit after taxation
28.1147.2
Adjustments for:
Depreciation59.355.4
Deferred taxation expense(1.5)2.2
Fixed asset impairment0.9-
Reversal of fixed asset termination costs(14.9)-
Share-based payments0.20.4
Equity-accounted earnings from associate and joint ventures(3.2)(5.0)
Investment property fair value increase(29.8)(9.1)
Derivative fair value (increase)/decrease(0.8)0.4
Items not classified as operating activities:
Loss on asset disposals0.5-
Decrease/(increase) in property, plant and equipment retentions and
payables34.9(10.4)
Decrease/(increase) in investment property retentions and payables5.0(0.1)
Items recognised directly in equity0.8-
Movement in working capital:
(Increase) in trade and other receivables(2.5)(22.0)
Decrease in taxation receivable/(payable)0.6(2.9)
(Decrease)/increase in accounts payable and provisions(46.6)13.0
Increase/(decrease) in other term liabilities0.1(0.1)
Net cash flow from operating activities
31.1169.0
Interim Financial Statements 202113
7.
Associate and joint ventures
Movement in the group’s carrying amount of investments in associate and joint ventures:
UnauditedUnaudited
6 months to
31 Dec 2020
6 months to
31 Dec 2019
$M$M
Movement in investment in associate and joint ventures continuing
Investment in associate and joint ventures at the beginning of the period114.7105.7
Further investment in joint ventures6.615.4
Share of profit after tax of associate and joint ventures3.25.0
Share of dividends received and repayment of partner contribution-(8.9)
Investment in associate and joint ventures at the end of the period
124.5117.2
Carrying value of investments in associate and joint ventures:
UnauditedAudited
As at
31 Dec 2020
As at
30 Jun 2020
$M$M
Investment in associate and joint ventures continuing
Tainui Auckland Airport Hotel Limited Partnership23.120.5
Tainui Auckland Airport Hotel 2 Limited Partnership28.321.7
Queenstown Airport Corporation Limited73.172.5
Total
124.5114.7
8.Distribution to shareholders
UnauditedUnaudited
6 months to
31 Dec 2020
6 months to
31 Dec 2019
Dividend payment date$M$M
2019 final dividend of 11.25 cps18 October 2019-136.3
2020 final dividendN/A--
As part of the capital restructure undertaken in April 2020 in response to COVID-19, Auckland Airport
agreed financial covenant waivers with its bank lenders and USPP noteholders and agreed that no
dividends will be paid while those waivers are in effect. Hence no final dividend was paid during the period
ended 31 December 2020 (31 December 2019, $104.4 million dividends paid in cash and $31.9 million of
dividends reinvested).
The company has a dividend reinvestment plan, but this was inactive during the period as no dividend was
paid.
Notes and accounting policies CONTINUED
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
9.
Property, plant and equipment
UnauditedAudited
As at
31 Dec 2020
As at
30 Jun 2020
$M$M
At fair value5,719.25,675.2
At cost214.7202.1
Work in progress at cost381.1372.8
Accumulated depreciation(248.5)(189.3)
Net carrying amount
6,066.56,060.8
The group carries land, buildings and services,
infrastructure and runway, taxiways and aprons at
fair value.
At 31 December 2020 and 31 December 2019 the
group undertook a desktop review of the property,
plant and equipment balances carried at fair value.
For assets valued using the discounted cash flow
approach, the 31 December 2020 desktop
assessment considered expectations of the timing
and shape of the recovery from COVID-19, which
remains uncertain. The changes since the last
valuations at 30 June 2020 include the expected
delay in establishing quarantine free travel, offset by
positive strides in vaccine development and rollout.
For assets valued using the optimised depreciated
replacement cost approach, the assessment
considered movements in the capital goods price
index provided by Beca Projects NZ Ltd (Beca). For
assets valued using the market value alternative use
and direct sales comparison approaches, the
assessment considered the outcome of the
investment property desktop review described in
note 10. These assessments indicated that there
was no material fair value movement in property,
plant and equipment from 30 June 2020.
Impact of COVID 19
The impact as at 30 June 2020 of COVID 19 on the
valuation of property, plant and equipment was set
out in note 11 of the 2020 Financial Report. Given
the circumstances, all of the valuations as at 30 June
2020, except for reclaimed land, were prepared on
the basis of “significant market uncertainty” or
“material valuation uncertainty”, and therefore the
valuers advised that less certainty should be
attached to their valuations than would normally be
the case. Due to the ongoing impacts of COVID-19,
including the considerable uncertainty as to the
timing and shape of the recovery, the group and its
valuers consider that the carrying values remain
subject to 'significant market uncertainty' or
'material valuation uncertainty'.
Vehicles,
plant and equipment and work in progress
are carried at cost.
Additions to property, plant and equipment were
$57.2 million for the six months ended 31 December
2020 (six months ended 31 December 2019:
$135.1 million).
Transfers from investment property were
$8.4 million for the six months ended 31 December
2020 (six months ended 31 December 2019:
$1.2 million). The transfers in both the current and
comparative periods were to make land available for
the international terminal exit road.
The following categories of property, plant and
equipment are leased to tenants:
•Aeronautical land, including land associated
with aircraft, freight and terminal use carried at
$216.0 million (30 June 2020: $216.0 million);
•Land associated with retail facilities within
terminal buildings carried at $1,667.5 million
(30 June 2020: $1,667.5 million); and
•Space within terminal buildings, being 13% of
total floor area or $123.2 million (30 June 2020:
13% of total floor area or $113.7 million).
Interim Financial Statements 202115
10.
Investment properties
UnauditedAudited
6 months to
31 Dec 2020
12 months to
30 Jun 2020
$M$M
Balance at the beginning of the period2,042.71,745.4
Additions29.9138.6
Transfer to property, plant and equipment (note 9)(8.4)(9.5)
Write-offs-(0.4)
Change in net revaluations29.8168.6
Balance at the end of the period
2,094.02,042.7
Investment property is measured at fair value, which
reflects market conditions at balance date. To
determine fair value, Auckland Airport commissions
investment property valuations at 30 June each year
and undertakes a desktop review at 31 December
each year.
At 31 December 2020 and 31 December 2019,
desktop reviews were performed by
Auckland Airport which comprised a review of
recent comparable transactional evidence of market
sales and leasing activity using market data
provided by Colliers. The reviews did not include full
property inspections or the issue of new valuation
reports but examined the likely effect on property
values relevant to Auckland Airport’s investment
property portfolio. The reviews indicated that there
was no material fair value movement in the overall
investment property portfolio between 30 June and
31 December 2020.
Impact of COVID-19
As reported in the 2020 Financial Report, the
group's overall investment property portfolio has
remained stable despite COVID-19. There has been
no material change in circumstances since 30 June
2020 and the portfolio continues to be supported
by high quality tenants, with long leases in industrial
properties. Although the group provided $2.8 million
of rent abatements to property tenants during the
six-month period, these were consistent with
expectations at 30 June 2020. There was no
material impact on overall property rental revenue
during the period (refer to notes 3 and 4 for further
information).
The group has assessed that, as at 31 December
2020, there is no 'material valuation uncertainty' for
investment properties. This assessment is based on
the aforementioned market data provided by
Colliers and the continued stability of the investment
property portfolio since 30 June 2020.
At 31 December each year, Auckland Airport also
reviews investment properties that are recently
constructed or in the latter stages of construction.
At 31 December 2020, a review of two new
investment properties was performed by Colliers.
The valuation of these two investment properties
resulted in a $29.8 million increase in the fair value
at 31 December 2020 (31 December 2019:
$9.1 million increase resulting from the valuation of
four investment properties either recently
constructed or in the latter stages of construction).
The following categories of investment property are
leased to tenants:
•Retail and service carried at $323.0 million
(30 June 2020: $279.1 million);
•Industrial carried at $1,295.7 million (30 June
2020: $1,240.9 million); and
•Other investment property carried at
$164.3 million (30 June 2020: $192.5 million).
Notes and accounting policies CONTINUED
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
11.
Issued and paid-up capital and earnings per share
UnauditedUnauditedUnauditedUnaudited
6 months to
31 Dec 2020
6 months to
31 Dec 2019
6 months to
31 Dec 2020
6 months to
31 Dec 2019
$M$MSharesShares
Opening issued and paid-up capital
1
1,678.6468.21,471,916,7911,210,674,696
Shares fully paid and allocated to
employees by employee share scheme0.30.152,40010,300
Shares vested to employees participating
in long-term incentive plans0.30.261,54689,379
Shares issued under the dividend
reinvestment plan-31.9-3,620,888
Closing issued and paid-up capital
1
1,679.2500.41,472,030,7371,214,395,263
1 During April 2020, the company issued an additional 257,510,728 shares as part of a $1.2 billion capital
raise (refer to the 2020 Financial Report for further details).
Earnings per share
The earnings used in calculating basic and diluted earnings per share is net profit attributable to equity
holders of $28.1 million (31 December 2019: $147.2 million).
The weighted average number of shares used to calculate basic and diluted earnings per share is as follows.
UnauditedRestated
6 months to
31 Dec 2020
6 months to
31 Dec 2019
SharesShares
For basic earnings per share1,471,966,2061,229,278,684
Effect of dilution of share options--
For diluted earnings per share
1,471,966,2061,229,278,684
The company has restated the prior period basic and diluted earnings per share to reflect the small dilution
that arose because the new shares issued at $4.66 under both the institutional share placement on 15 April
2020 and the share purchase plan on 1 May 2020 were priced at a 7.5% discount to the $5.04 closing
price on the NZX on 3 April 2020, immediately before the equity raise was announced. Technically, the
extra shares allotted because of the issue discount versus the number required if there was no discount is
referred to as the “implied bonus” element. The prior period comparatives have been adjusted downwards
to reflect those extra bonus shares. There is no adjustment required for the current period.
The reported basic and diluted earnings per share for the six months ended 31 December 2020 is
1.91 cents (six months ended 31 December 2019: 11.97 cents).
Interim Financial Statements 202117
12.
Borrowings
UnauditedAudited
As at
31 Dec 2020
As at
30 Jun 2020
$M$M
Current
Commercial paper91.991.9
Bonds150.0150.0
USPP notes140.678.9
Total short-term borrowings
382.5320.8
Non-current
Bank facilities210.0205.0
Bonds675.0675.0
USPP notes471.5613.5
AMTN notes327.8330.9
Total term borrowings
1,684.31,824.4
Total
Commercial paper91.991.9
Bank facilities210.0205.0
Bonds825.0825.0
USPP notes612.1692.4
AMTN notes327.8330.9
Total borrowings
2,066.82,145.2
In the six-month period to 31 December 2020, the company did not issue or repay any bonds or notes but
did draw down $5 million on existing bank facilities.
The financial covenant waivers, granted by bank and USPP lenders remain in place until December 2021
(inclusive). During the current and prior periods, there were no defaults or breaches on any of the borrowing
facilities.
The carrying amount of USPP and AMTN notes has reduced due to foreign exchange rate movements. The
foreign currency exposure is fully hedged by cross-currency interest rate swaps, which have similarly
reduced in value (refer to note 14).
Notes and accounting policies
CONTINUED
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
13.
Financial risk management
The group has a treasury policy which limits
exposure to market risk for changes in interest rates
and foreign currency, liquidity risk and counter-party
credit risk. The group has no other material direct
price risk exposure.
The interim financial statements do not include all
financial risk management information and
disclosures and should be read in conjunction with
note 18 of the 2020 Financial Report.
Further information on risk management is
contained in the corporate governance section of
the 2020 Financial Report.
There have been no significant changes in the
financial risk management objectives and policies
since 30 June 2020.
14.
Fair value of financial instruments
There have been no transfers between levels of the
fair value hierarchy used in measuring the fair value
of financial instruments in the period to
31 December 2020 (30 June 2020: nil).
The following financial instruments are carried at
amortised cost, which approximates their fair value:
•Cash;
•Trade and other receivables;
•Accounts payable and accruals;
•Other term liabilities; and
•Borrowings issued at floating rates.
Borrowings issued at fixed rates, including bonds,
USPP notes and AMTN notes, are also carried at
amortised cost, which differs from their fair value.
The fair values are shown in the table below for
comparative purposes and are determined as
follows:
•The group’s bonds are classified as level 1. The
fair value of the bonds is based on the quoted
market prices for these instruments at balance
date;
•The group’s USPP notes are classified as level
2. The fair value of the USPP notes has been
determined at balance date on a discounted
cash flow basis using the USD Bloomberg
curve and applying discount factors to the
future USD interest payment and principal
payment cash flows; and
•The group’s AMTN notes are classified as level
2. The fair value of the AMTN notes has been
determined at balance date on a discounted
cash flow basis using the AUD Bloomberg
curve and applying discount factors to the
future AUD interest payment and principal
payment cash flows.
Unaudited
31 Dec 2020
Audited
30 Jun 2020
Carrying
amount
Fair
value
Carrying
amount
Fair
value
$M$M$M$M
Bonds825.0873.4825.0878.9
USPP notes612.1625.3692.4697.3
AMTN notes327.8326.8330.9316.0
Interim Financial Statements 202119
14.
Fair value of financial instruments CONTINUED
The group’s derivative financial instruments are carried at fair value and are classified as level 2. The fair
values are determined on a discounted cash flow basis. The future cash flows are forecast using the key
inputs presented in the table below. The forecast cash flows are discounted at a rate that reflects the
credit risk of both counterparties to the derivative financial instruments.
UnauditedAudited
Fair value
As at
31 Dec 2020
Fair value
As at
30 Jun 2020
$M$MValuation key inputs
Interest rate swaps
Forward interest rates (from observable yield
curves) and contract interest rates
Liabilities(124.2)(137.6)
Interest basis swaps
Observable forward basis swap pricing and
contract basis rates
Assets1.11.2
Cross-currency interest
rate swaps
Forward interest and foreign exchange rates
(from observable yield curves and forward
exchange rates) and contract rates
Assets159.4244.8
15.
Commitments
(a) Property, plant and equipment
The group had contractual obligations to purchase
or develop property, plant and equipment for
$37.1 million at 31 December 2020 (30 June 2020:
$91.9 million).
(b) Investment property
The group had contractual obligations to purchase,
develop, repair or maintain investment property for
$64.9 million at 31 December 2020 (30 June 2020:
$64.6 million).
Notes and accounting policies CONTINUED
FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
16.
Contingent liabilities
Noise insulation
Auckland Airport Designation 1100, contained in the
Auckland Unitary Plan, sets out the requirements for
noise mitigation for neighbouring properties affected
by aircraft noise. The conditions include obligations
on the company to mitigate the impact of aircraft
noise through the installation of noise mitigation
packages to existing dwellings and schools. The
noise mitigation packages provide treatment of
dwellings to achieve an internal noise environment
of no more than 40dB. The company is required to
subsidise 100% of treatment costs for properties in
the high aircraft noise area and 75% in the medium
aircraft noise area.
The aircraft noise contours included in Designation
1100 reflect the long-term predicted aircraft noise
levels generated by aircraft operations from the
existing runway and proposed northern runway.
Annually, the company projects the level of noise
that will be generated from aircraft operations for the
following 12 months. These annual projections
confirm which dwellings and schools are eligible for
noise mitigation each year and offers are sent out to
those affected properties. It is at the discretion of
individual landowners whether they accept a noise
mitigation package.
Projections are undertaken annually to determine
eligibility, and the rate of acceptance of offers of
treatment by landowners is variable. However, it is
estimated that further costs on noise mitigation
should not exceed $8.1 million (30 June 2020:
$8.2 million).
Contractor claims
A contingent liability of $11.6 million (30 June 2020:
$10.4 million) is estimated for contractor claims in
respect of capital works which are under ongoing
independent assessment of both entitlement and
value. The group has taken a highly conservative
view by including all known uncertified contractor
claims as part of this estimate.
17.
Events subsequent to balance date
On 12 February 2021, the directors of Queenstown Airport resolved that no interim dividend would be
declared for the period ended 31 December 2020.
On 17 February 2021, the directors of Auckland Airport resolved that no interim dividend would be declared
for the period ended 31 December 2020.
Interim Financial Statements 202121
INDEPENDENT AUDITOR’S REVIEW REPORT
TO THE SHAREHOLDERS OF AUCKLAND INTERNATIONAL AIRPORT LIMITED
Conclusion
We have reviewed the condensed consolidated interim financial statements (‘interim financial statements’) of
Auckland International Airport Limited (‘the Company’) and its subsidiaries (‘the Group’) which comprise the
consolidated interim statement of financial position as at 31 December 2020, and the consolidated interim
income statement, statement of comprehensive income, statement of changes in equity and cash flow statement
for the six months ended on that date, and a summary of significant accounting policies and other explanatory
information on pages 2 to 21.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial
statements of the Group do not present fairly, in all material respects, the financial position of the Group as at
31 December 2020 and its financial performance and cash flows for the period ended on that date in
accordance with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial Reporting.
Emphasis of Matter – Significant market uncertainty or material valuation
uncertainty related to the carrying values of property, plant and equipment
We draw your attention to note 9 in the condensed consolidated interim financial statements, where the Group
discloses that due to the ongoing impacts of COVID-19, including the considerable uncertainty as to the timing
and shape of the recovery, the Group and its independent registered valuers consider that the carrying values of
the property, plant and equipment, except for reclaimed land, remain subject to “significant market uncertainty”
or “material valuation uncertainty” as at 31 December 2020 and therefore less certainty should be attached to
the valuations than would normally be the case. Our opinion is not modified in respect of this matter.
Basis for Conclusion
We conducted our review in accordance with NZ SRE 2410 (Revised) Review of Financial Statements Performed
by the Independent Auditor of the Entity (‘NZ SRE 2410 (Revised)’). Our responsibilities are further described in
the Auditor’s Responsibilities for the Review of the Interim Financial Statements section of our report.
We are independent of the Group in accordance with the relevant ethical requirements in New Zealand relating to
the audit of the annual financial statements, and we have fulfilled our other ethical responsibilities in accordance
with these requirements.
Our firm carries out other assignments for Auckland International Airport Limited in the area of taxation advice,
AGM vote scrutineering assistance and assurance reporting for regulatory purposes. These services have not
impaired our independence as auditor of the Group. In addition to this, partners and employees of our firm deal
with the Group on normal terms within the ordinary course of trading activities of the business of the Group. The
firm has no other relationship with, or interest in, the Group.
Directors’ responsibilities for the interim financial statements
The directors are responsible on behalf of the Company for the preparation and fair presentation of the interim
financial statements in accordance with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial
Reporting and for such internal control as the directors determine is necessary to enable the preparation and fair
presentation of the interim financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s responsibilities for the review of the interim financial statements
Our responsibility is to express a conclusion on the interim financial statements based on our review. NZ SRE
2410 (Revised) requires us to conclude whether anything has come to our attention that causes us to believe
that the interim financial statements, taken as a whole, are not prepared, in all material respects, in accordance
with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial Reporting.
A review of the interim financial statements in accordance with NZ SRE 2410 (Revised) is a limited assurance
engagement. We perform procedures, primarily consisting of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. The procedures
performed in a review are substantially less than those performed in an audit conducted in accordance with
International Standards on Auditing (New Zealand) and consequently do not enable us to obtain assurance that
we might identify in an audit. Accordingly we do not express an audit opinion on the interim financial statements.
Restriction on use
This report is made solely to the company’s shareholders, as a body. Our review has been undertaken so that we
might state to the company’s shareholders those matters we are required to state to them in a review report and
for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company’s shareholders as a body, for our engagement, for this report, or for the conclusions we
have formed.
Andrew Dick
Partner
for Deloitte Limited
Auckland, New Zealand
18 February 2021
Interim Financial Statements 202123
Reporting entity
The company was incorporated on 20 January
1988, under the Companies Act 1955, and
commenced trading on 1 April 1988. The company
was re-registered under the Companies Act 1993
on 6 June 1997. On 25 June 1998, the company
adopted a revised constitution, approved as
appropriate for a publicly listed company. Further
revisions of the constitution were adopted on
21 November 2000, 18 November 2002,
23 November 2004 and 23 October 2019 to
comply with NZX and ASX Listing Rule
requirements.
The company was registered in Australia as a foreign
company under the Corporations Law on
22 January 1999 (ARBN 085 819 156) and was
granted Foreign Exempt Listing Entity status by ASX
on 22 April 2016.
Stock exchange listings
The company’s shares were quoted on the NZX on
28 July 1998. The company’s shares were quoted
on the ASX effective 1 July 2002. The company is
not subject to chapters 6, 6A, 6B and 6C of the
Australian Corporations Act dealing with the
acquisition of shares (i.e. substantial holdings and
takeovers).
The total number of voting securities on issue as at
31 December 2020 was 1,472,647,437.
Waivers granted by NZX
NZX class waiver and ruling dated 19 March 2020
On 19 March 2020 NZX issued a class waiver and
ruling in relation to Section 4 of the NZX Listing
Rules. The company relied upon the class waiver in
respect of Listing Rule 4.5.1 in relation to the April
2020 $1 billion equity raise (Equity Raise) and
Listing Rule 4.3.1 in relation to the April 2020
$200 million Share Purchase Plan (SPP).
Under the class waiver, the placement cap under
Listing Rule 4.5.1 was increased from 15% to 25%,
and the cap per registered holder under Listing Rule
4.3.1 for issues under a Share Purchase Plan was
increased from $15,000 to $50,000 and the total
cap from 5% to 30% of equity securities of that class
at the time of offer.
The Equity Raise involved the issuance of 17.66%
of the total equity securities at the time of the offer.
The SPP was offered to all eligible existing
shareholders of the company, enabling them to
each subscribe for up to a maximum of NZ$50,000
of new company shares and had an average
application of approximately NZ$15,000.
Auditors
Deloitte Limited has continued to act as external
auditor of the company and has undertaken a review
of the interim financial statements for the six months
ended 31 December 2020. The external auditor is
subject to a partner rotation policy.
Credit rating
As at 31 December 2020, the S&P Global Ratings’
long-term credit rating for the company was A-
Stable Outlook.
Company publications
The company informs investors of the company’s
business and operations by issuing an annual report
(with notice of meeting) and interim financial
statements.
Enquiries
Shareholders with enquiries about transactions,
changes of address or dividend payments should
contact Link Market Services Limited on +64 9 375
5998. Other questions should be directed to the
Company Secretary at the registered office.
Shareholder information
Share Registrars
New Zealand:
Link Market Services Limited
Level 11, Deloitte Centre
80 Queen Street
Auckland 1010
PO Box 91976
Auckland 1142
Australia:
Link Market Services Limited
Level 12
680 George Street
Sydney
NSW 2000
Locked Bag A14
Sydney South
NSW 1235
Financial calendarHalf-yearFull-year
Results announcementFebruaryAugust
Reports publishedFebruaryAugust
Annual meeting-October
Disclosure financial statements-November
Interim Financial Statements 202125
DIRECTORS
Justine Smyth CNZM
Christine Spring
Patrick Strange, chair
Julia Hoare
Mark Binns
Tania Simpson
Dean Hamilton
Liz Savage
SENIOR MANAGEMENT
Adrian Littlewood
chief executive
Philip Neutze
chief financial officer
Anna Cassels-Brown
general manager operations
Jonathan Good
general manager technology and marketing
André Lovatt
general manager infrastructure
Scott Tasker
general manager aeronautical commercial
Mark Thomson
general manager property and commercial
Mary-Liz Tuck
general manager corporate services and
general counsel
REGISTERED OFFICE NEW ZEALAND
4 Leonard Isitt Drive
Auckland Airport Business District
Manukau 2022
New Zealand
Phone: +64 9 275 0789
Freephone: 0800 Airport (0800 247 7678)
Facsimile: +64 9 275 4927
Email: tellus@aucklandairport.co.nz
Website: www.aucklandairport.co.nz
REGISTERED OFFICE AUSTRALIA
c/o KPMG
147 Collins Street
Melbourne
Victoria 3000
Australia
Phone: +61 3 9288 5555
Facsimile: +61 3 9288 6666
Website: www.kpmg.com.au
MAILING ADDRESS
Auckland International Airport Limited
PO Box 73020
Auckland Airport
Manukau 2150
New Zealand
GENERAL COUNSEL & GENERAL
MANAGER CORPORATE SERVICES
Mary-Liz Tuck
AUDITORS
External auditor – Deloitte Limited
Internal auditor – Ernst & Young
Share registry auditor – Grant Thornton
Corporate directory
---
Interim Results
Presentation
18 February 2021
Adrian Littlewood
Chief Executive
Philip Neutze
Chief Financial Officer
2021
Interim Results
Important notice
2
Disclaimer
This presentation is given on behalf of Auckland International Airport Limited (NZX: AIA; ASX: AIA; ADR: AUKNY). Information in this presentation:
•is provided for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in Auckland International
Airport Limited (Auckland Airport);
•should be read in conjunction with, and is subject to, Auckland Airport’s unaudited Interim Financial Statements for the six months ended 31 December 2020, prior annual
and interim reports, and Auckland Airport's market releases on the NZX and ASX;
•may include forward-looking statements about Auckland Airport and the environment in which it operates which are subject to uncertainties and contingencies outside of
Auckland Airport's control. Auckland Airport's actual results or performance may differ materially from these statements;
•includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance;and
•may contain information from third parties believed to be reliable; however, no representations or warranties are made as to theaccuracy or completeness of such
information.
All information in this presentation is current at the date of this presentation, unless otherwise stated. Auckland Airport is not under any obligation to update this presentation at
any time after its release, whether as a result of new information, future events, or otherwise.
All currency amounts are expressed in New Zealand dollars unless otherwise stated and figures, including percentage movements, are subject to rounding.
Refer to page 33 for a glossary of the key terms used in this presentation.
Non-GAAP measures
This presentation contains references to non-GAAP measures including EBITDAFI, EBITDA and underlying profit or loss. A reconciliation between reported profit after tax and
the non-GAAP measure of underlying profit or loss is included in the Appendix.
The directors and management of Auckland Airport understand the importance of reported profits meeting accounting standards. Because we comply with accounting
standards, investors know that comparisons can be made with confidence between different companies and that there is integrity in our reporting approach. However, we
believe that an underlying profit or loss measurement can also assist investors to understand what is happening in a businesssuch as Auckland Airport, where revaluation
changes can distort financial results or where one-off transactions, both positive and negative, can make it difficult to compare profits between years.
For several years, Auckland Airport has referred to underlying profit or loss alongside reported results. We do so when we report our results, but also when we give our market
guidance (where we exclude fair value changes and other one-off items) or when we consider dividends and our policy to pay 100% of underlying profit after tax (excluding
unrealisedgains and losses arising from revaluation of property or treasury instruments and other one-off items).
In referring to underlying profits or losses, we acknowledge our obligation to show investors how we have derived this result.
Highlights
2021
Interim Results
Highlights
Financial
performance
Our continuing
journey
Outlook
The past 6 months havebeen a period of adjustment
...and have prepared for a recovery in the
business
We have responded to the demands of the
COVID-19 environment while taking the opportunity
to upgrade core infrastructure...
4
2021
Interim Results
Highlights
Financial
performance
Our continuing
journey
Outlook
Results at a glance
-64.9%
Revenue
$131.5m
-68.4%
EBITDAFI
$88.2m
Reported profit
after tax
$28.1m
-80.9%
Passenger
movements
2.8m
Aircraft
movements
44,737
-73.4%
-49.5%
Dividend
0.0cps
Capital
investment
$93.7m
-59.4%
1.Auckland Airport recognises EBITDAFI and underlying profit or loss are non-GAAP measures. A reconciliation between reported profit after tax and underlying loss after tax is included in the Appendix.
2.Net capital expenditure additions after $0.9m of capex impairments. Includes contributions to investments in Joint Ventures (Pullman). Excludes any impact from termination cost provisions
Earnings per share
1.91 cps
Underlying
loss
$10.5m
-107.5%
Loss per share
0.71 cps
2
1
5
2021
Interim Results
Highlights
Financial
performance
Our continuing
journey
Outlook
Impact of travel restrictions felt across the business
Aeronautical
$40.3m revenue -73.5%
Lower PAX reflecting COVID-19
-97.1% International
-94.0% Transits
-44.6% Domestic
Majority of international retail closed
-40.0% International PSR
+8.5% Domestic PSR
Development momentum continues
$223m-plus under construction
3
$2.41b portfolio valuation
4
$116.0m rent roll
10.1 year WALT
$47.0m revenue 2.4%
Property
Retail
Lower activity reflecting COVID-19
-81.7% exits
-71.4% ARPS
Transport
Travel restrictions impacted demand
49.2% average occupancy across
both hotels
6
$13.8m revenue
5
-34.0%
Hotels
Queenstown
$13.6m revenue -53.3%
PAX reductions owing to COVID-19
-100.0% International
-19.2% Domestic
$7.0m income -93.8%$12.5m revenue -63.6%
3.Estimated asset value on completion
4.Includes both IP and PPE assets managed by Property
5.Includes ibis Budget Hotel and 100% of Novotel Hotel revenues
6.The Novotel Hotel has been solely occupied by the Ministry of Health in the 6 months to 31 December 2020 as a managed isolation and quarantine facility
6
2021
Interim Results
Highlights
Financial
performance
Our continuing
journey
Outlook
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20
Monthly PAX as a % of PCP
DomesticInternational (incl transits)
-
2
4
6
8
10
12
2006
2007
20082009201020112012
201320142015
20162017201820192020
Total PAX (m) in the six months to December
Monthly passenger numbers
Source: Auckland Airport
Passenger movements (6 months to December)
Auckland Airport’s PAX numbers have been resilient over the
long-term, but COVID-19 has had an unprecedented impact
Under Alert Level 1, domestic PAX has partially recovered to
c.65% of pre-COVID-19 levels. Meanwhile, international
flows remain very low while travel restrictions are in place
Auckland Alert Level 1
Auckland Alert Level 2
Auckland Alert Level 2
(with travel restrictions)
Auckland Alert Level 3
Domestic recovering, but international effectively shut
7
2021
Interim Results
Highlights
Financial
performance
Our continuing
journey
Outlook
Living with COVID and proposing a managed path out
Played a critical role in managing COVID-19
and proposing options for recovery paths
•Close coordination withgovernment, border
agencies and airlines to reinstate fulldomestic
services at Level 2, manage ongoing changes
to internationalborders
•Collaborated with partners to propose:
–blueprint for a Trans-Tasman Safe Travel
Zone; and
–quantitative risk-based border framework,
guided by an expert medical panel
•Introduced new split terminal model and
secure off-site processing to support new Safe
Travel border models
•Launch partner for new saliva PCR COVID-19
test to support development of better testing
options for staff and potentially future pre-
travel and domestic surveillance testing
The path out will need further close coordination
across business and government
•Ongoing development and operationalisation of a
full risk-managed model for border management –
in line with other border risks (e.g. aviation/bio
security)
•Alignment on preferred ‘authority to fly’ system
(e.g. IATA TravelPass) that considers
country/individual risk for non-Safe Travel zone
countries
•Transparent approach to thresholds/ metrics
required to enable travel restart (e.g. vaccines,
domestic health performance) and plans for any
resurgence
•Launch of selected Safe Travel Zone
destinationswhere appropriate
(e.g.Australia/Pacific Islands)
•Continued development of testing, tracing and
other domestic health security measures
When appropriate, start of a Safe Travel Zone into Australia and the Pacific Islands
represents a material near-term opportunity
8
Financial
performance
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
First underlying loss in the airport’s history
For the six months ended 31 December($m)20202019Change
Revenue
131.5374.7(64.9%)
Expenses
7
43.395.5(54.7%)
Earnings before interest, taxation, depreciation,
fair value adjustments and investments in associates(EBITDAFI)
88.2279.2(68.4%)
Share of profit from associates
3.25.0(36.0%)
Derivative fair value movement
0.8(0.4)(300.0%)
Investment property revaluation
29.89.1227.5%
Depreciation expense
59.355.47.0%
Interestexpense
35.034.70.9%
Taxationexpense
(0.4)55.6(100.7%)
Reported profit after tax
28.1147.2(80.9%)
Underlying profit / (loss)after tax
8
(10.5)139.9(107.5%)
7.Expenses include the benefit of a $14.9m reversal of the FY20 provision for termination costs and a $3.8m reversal of expected credit loss provisions
8.A reconciliation between reported profit after tax and underlying profit / (loss) after tax is included in the Appendix.
10
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
Lower PAX numbers impacted key income streams
For the six months ended 31 December($m)20202019Change
Airfield income
30.860.8(49.3%)
Passenger services charge
9.591.1(89.6%)
Retail income
7.0113.6(93.8%)
Car park income
12.534.3(63.6%)
Investment property rental income
47.045.92.4%
Other rental income
8.411.0(23.6%)
Other income
16.317.9(8.9%)
Total revenue
131.5374.7(64.9%)
•Large declines in PAX volumes continued to impact the business
•Airfield income decreased 49.3%, with aircraft movements reducing less than PAX volume as airlines
maintained connectivity with reduced PAX, but higher cargo loads. This includes an 80.2% increase in Aircraft
parking revenues due to longer aircraft layover times.
•Passenger services charge fell 89.6%, greater than the 73.4% reduction in total PAX, reflecting the much
greater percentage fall in higher-yielding passengers
•Retail income decreased by 93.8%, dominated by international PAX reductions, reflecting New Zealand’s
ongoing border restrictions and our support of retail tenants. Car parking income decreased 63.6% reflecting
the combined effects of ongoing international travel restrictions and the partial recovery of domestic activity
•Property rental income increased by 2.4% driven by rental growth in the existing portfolio and a part year
contribution from the new Foodstuffs distribution centre, partially offset by reduced ibis Budget hotel income
11
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
Significant cost reductions to reposition the business
12
For the six months ended 31 December($m)20202019Change
Staff
21.030.6(31.4%)
Asset management, maintenance and airport operations
24.542.5(42.4%)
Rates and insurance
10.68.919.1%
Marketing and promotions
0.25.6(96.4%)
Professional services and levies
1.52.8(46.4%)
Fixed asset impairment
0.9-n/a
Reversal of fixed asset termination costs
(14.9)-n/a
Other expenses
3.35.9(44.1%)
Reversal of expected credit losses
(3.8)(0.8)(375.0%)
Total operating expenses
43.395.5(54.7%)
Depreciation
59.355.47.0%
Interest
35.034.70.9%
•A significant cost reduction programme involving reductions in staffing levels, outsourced activities (e.g. car
parking, Valet and bus operations, baggage and trolley services, VIP lounges) and marketing delivered a
c.$33 million (34%) reduction in operating costs in the period.
•Better than forecast collection of overdue debts from airlines, tenants and retailers and more favourable
project termination costs contributed a further c.$19 million reduction in total operating expenses.
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
95.5
62.6
43.3
(8.9)
(8.1)
(5.4)
(5.0)
(5.5)
(14.9)
(3.8)
(0.6)
-
20.0
40.0
60.0
80.0
100.0
Opex
(1H20)
Outsourced
operations
StaffMarketing &
promotions
Utilities &
cleaning
OtherNormalised
opex (1H21)
Termination
costs
Expected
credit losses
OtherOpex
(1H21)
NZ$m
Normalised opexdown materially
13
•The new operating environment necessitated a significant organisational response. Every aspect of the cost
base was challenged resulting in a 34% reduction in core operating costs compared to the prior period.
•Scaled back operational activities to reflect the lower demand environment with reductions in outsourced
operations following the temporary closure of car parks and the Strata Lounge and reduced bus services
•Staff costs declined materially on the prior period reflecting both a 35% reduction in headcount and the
majority of staff and directors taking a voluntary remuneration reduction in July and August
•Marketing & promotions scaled back to reflect travel restrictions
•Improved outcomes in the collection of expected credit losses and contract terminations have resulted in a
reversal of provisions in the period
(34%)
(55%)
1H21 v 1H20 operating expenditure
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
14
Scaled-back capex focused on asset upgrades
Lower aeronautical activity has facilitated the upgrade and
renewal of core assets
•Capital expenditure of $93.7 million
9
targeted core airfield
renewals, the roading network and new property developments
Airfield ($15.2 million)
•Completed the runway slab replacement programme,
upgrading the east and west touchdown zones
Roading ($33.5 million)
•Continued major upgrade of the northern airport access road,
(George Bolt Memorial Drive) to include HOV lanes, shared
pedestrian and cycle paths, and new wayfinding gantries.
•Construction of SH20B HOV lanes and upgrade to Prices Rd
access continues
•New terminal exit road to provide a one-way loop past the
international terminal before reconnecting back to the city at
Manu TapuDrive
Property ($36.4 million)
•Completion of Foodstuffs development and the extensions of
Interwaste and DHL.
•Construction of two pre-leased properties underway for Geodis
Wilson and Hellmann
Historical capital expenditure
9.Net capital expenditure additions after $0.9m of capex impairments. Includes contributions to investments in Joint Ventures (Pullman). Excludes reduction of termination cost provisions
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
150
100
325
150
140
15
55
100
92
130
65
295
284
-
150
300
450
Dec 21Dec 22Dec 23Dec 24Dec 25Dec 26Dec 27
$m
BondsBank FacilitiesFRNCommercial PaperUSPPAMTN
15
10.Gearing defined as nominal value of debt plus derivative liabilities divided by nominal value of debt plus derivative liabilities plus the book value of equity
11.Interest coverage defined as reported NPAT plus taxation, interest expense, revaluations and derivative changes (broadly EBIT) divided by interest expense
12.S&P A-rating threshold
Significant liquidity available
Liquidity of $1.6 billion to support the business
•No change in debt facilities since 30 June 2020
•Committed undrawn facility headroom at31 December
of c.$925 million (Jun-20: $936 million), and $682 million
in available cash (Jun-20: $765 million)
•Bank and USPP waivers remain in place for any interest
coverage and gearing covenant breaches until 31
December 2021 (inclusive)
•Dividends remain suspended while covenant waivers in
place
•A-credit rating maintained
CovenantDec-20Jun-20
Gearing
10
≤ 60%23.3%23.5%
Interest coverage
11
≥ 1.5x(0.11x)2.62x
Debt to enterprise value16.5%19.4%
Net debt to enterprise value11.0%12.5%
Funds from operations interest cover
12
2.5x2.0x3.4x
Funds from operations to net debt
12
11.0%7.1%18.6%
Weighted average interest cost4.04%3.89%
Average debt maturity profile (years)3.394.66
Percentage of fixed borrowings65.5%65.4%
Drawn debt maturity profile as at31 December 2020
Credit metrics and key lending covenants
Average maturity
Our continuing
journey
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
RespondRecoverAccelerate
Response to COVID-19
Having moved quicklyto respond to challenging environment that COVID-19 presented, Auckland
Airport is positioning for a recovery in aeronautical activity
•Following the outbreak, we immediately revised operational
procedures and established new operational models to
assiststaff, travellers, and support the new border
requirements:
‒additional cleaning protocols and solutions to provide a
higher level of hygiene assurance;
‒management of physical distancing including physical
layout;
‒testing procedures for frontline staff;
‒improved passenger communications; and
‒reorganisingthe international terminal layout to separate
passengers
•ACI’s Airport Health Accreditation of our COVID-19 health and
safety measures –the first New Zealand airport to achieve this
•Having responded to the demands of a new operating
environment caused by COVID-19, we are now positioning the
business for a recovery in aeronautical activity
Focused on safety
..
Wash and dry your
hands often using
use soap or hand
sanitiser
Dispose of any
tissues in the
rubbish bin
Cover your coughs or
sneezes with tissues
or your elbow
Terminal signage to assist passengers
Leave space, travel
safe
17
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
RespondRecoverAccelerate
Positioning for the recovery
Runway slab replacement work
International terminal exit road works
•With the support of airline partners and other industry
stakeholders we’ve successfully completed the
replacement of more than 360 slabs in the runway’s east
and westtouchdown zones
•Work on a pavement upgrade programmefor taxiways
and apron began in January 2021 and will continue
•Progressed the airside fuel network upgrade to enable
future flexible operations of the mid-field
•Recommenced work on the new one-way exit road, a
one-way loop road forthe international terminal
•Partnership with Waka Kotahi / NZ Transport Agency and
Auckland Transport will bring greater public transport
connectivity, with high-frequency, electric bus services on
dedicated HOV lanes between the airport and Puhinui
Station’s bus and train hub
The low-volume of aeronautical activity has provided a unique
opportunity to accelerate select infrastructure upgrades
18
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
Retail
Transport
•Substantial decline in retail income of 94% reflecting
the decrease in international PAX
•Tailored approach to temporary retail tenant relief on
a case-by-case basis
•Launched online retail proposition ‘The Mall’ as part
of domestic repositioning
•Domestic PSR 8.5% above pre-COVID-19 levels
•Transport revenue decreased 64%, reflecting the
ongoing international travel restrictions, partially
offset by the resumption of domestic travel
•Full suite of domestic products opened in the period
•Domestic parking rebounded strongly following the
resumption of domestic travel and on a per PAX
basis is up on pre-COVID-19 levels
•Using excess international parking capacity to
accommodate additional domestic demand
Positioning for the recovery (cont’d)
RespondRecoverAccelerate
Our retail and transport offering has repositioned to cater to the resumption in domestic travel
Update
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20
% of PCP month
Domestic PAXDomestic carparking exits
19
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
Positioning for the recovery (cont’d)
RespondRecoverAccelerate
Foodstuffs development
New Geodis Wilson development at TimberlyRoad
$116.0m
Investment property
rent roll
181
hectares of land available for
development
98.2%
Occupancy
10.1 years
WALT
Development momentum and quality of tenants provide
resilience and underpin future income growth
•10.5% increase in rent roll continues to demonstrate the
strength of the airport property development proposition
•Completed developments in the six months include:
–84,000m
2
Foodstuffs distribution centre and head office; and
–Speculative 10,000m
2
warehouse across six units which has
been leased to Zeta Group and Tempurat 27 Timberly Road
•Quality pipeline of $172 million of new developments including:
–EBOS (Healthcare Logistics);
–Geodis Wilson;
–Hellmann;
–DHL Expansion; and
–Interwaste
New hotels
•Construction continued to complete the structures and façades
of the 5-star TeArikinuiPullman and 4-star Mercure hotels. Fit-
outs will occur when demand conditions return
20
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
2.0%
0.2m
2.3%
0.2m
2.6%
0.3m
2.9%
0.3m
3.1%
0.3m
3.5%
0.4m
4.2%
0.4m
7.5%
0.8m
9.1%
1.0m
37.3%
3.9m
0.01.02.03.04.0
Canada
Western Samoa
India
Japan
Cook Islands
United Kingdom
Fiji
China
United States
Australia
CY19 PAX by market (m)
Positioning for the recovery (cont’d)
RespondRecoverAccelerate
Auckland Airport international PAX flows pre-COVID-19 by market
15
13.Source: Tourism New Zealand
14.Source: Tourism & Transport Forum Australia: COVID-19 travel and leisure insights
15.Auckland Airport’s CY19 international PAX (excluding transits) based on the country of terminal destination for departures and
country of boarding origin for arrivals. The % indicates how much of the total CY19 international PAX each market represents
Reposition the business to respond to a recovery
in the travel industry when safe to do so
•While domestic PAX achieved c.65% of FY19
levels, considerable uncertainty remains, given
the risk of future changes to alert levels
•Australia is Auckland Airport’s largest
international market, c.300% greater than the
second largest, USA
•At the appropriate time, two-way quarantine free
travel between Australia and New Zealand
would provide a significant boost to local tourism
and our business given the importance of the
Australian market
‒Australians made 11.3 million international
outbound trips in 2019, spending an
estimated AU$65 billion
‒Australian travellersspent over $2.7 billion
p.a. in New Zealand prior to COVID-19
13
‒surveys suggest strong appetite in Australia
for overseas travel once borders re-open –
New Zealand strong preference
14
21
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
Positioning for the recovery (cont’d)
RespondRecoverAccelerate
Key future capacity projects
Establishing a trigger-based capital roadmap to further invest in infrastructure when conditions
support
•Flexible, resilient, affordable, and stageable
30-year masterplan remains appropriate
•Significant progress had been made on the 8
key anchor projects under the pre-pandemic
programme–but now on hold
•Have reviewed with stakeholders the need,
timing, and investment triggers
•Concluded that key elements of the capital
roadmap remain relevant, however an
opportunity exists for changes to simplify, re-
sequence and incrementalisedelivery to gain
greater efficiency at a lower cost and match
recovery path
•Investigating the purchase of local airfield
lighting assets following Airways’ proposal to
exit this service
1
2
3
4
5
6
7
8
1
2
3
4
5
6
7
8
Northern stands & taxiways
Northern road network
Domestic terminal works
New international arrivals
New domestic jet hub
Northern runway
MSCP & PUDO
New cargo precinct
22
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
Supporting our local community
•Contributed $356,682 to the Auckland Airport Community
Trust
•Local community focus for the Twelve Days of Christmas
programme, distributed $100,000 donated by travellers
•Ara continued to connect local people with training and
employment opportunities, as part of joint initiatives with
government agencies, training providers and employers
•Continued longstanding support of The Life Education Trust
•Our support of the Sky Tower Stair Challenge since the first
climb in 2005 continued, with AES staff raising funds for
Leukaemiaand Blood Cancer New Zealand
•Commencement of Māorileadership programmeManu Ao,
designed to enhance the skills and sense of indigenous self
in Māoristaff
Manurewa South School students in their veggie garden installed
by OkeCharity, a Twelve Days of Christmas grant recipient
We are committed to doing our best for our business, our shareholdersandalso for our local
community
Charities supported in the Twelve Days of Christmas grants
23
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
Operating sustainably
Continued strong focus on operating in a sustainable way to create enduring value
•FY20 marked the end of many of the
environmental targets we set in 2013
✓nearly doubled targeted waste reduction, with
a 39% decrease per PAX;
✓achieved science-based carbon target of a
45% reduction per m
2
, five years early
did not achieve water reduction target which
was adversely affected by water use
associated with construction activities
•Achievements recognisedby ongoing inclusion in
the Dow Jones Sustainability Asia Pacific Index
•A new 10-year sustainability strategy is under
development:
‒based on four pillars: purpose; people;
community; and place
‒involving the setting of new targets to guide
activities, including:diversity, health & safety,
resource consumption; and carbon reduction /
neutrality
Four pillars of Auckland Airport’s 2030 Sustainability Strategy
PLACE
Kaitiakitanga
PEOPLE
Whanau
COMMUNITY
Hapori
PURPOSE
Kaupapa
24
Outlook
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
Outlook
Guidance
•As we look to the remainder of the 2021 financial year, we continue
to face considerable uncertainty regarding the timing of the recovery
in international travel
•Despite this uncertainty, we are providing underlying earnings
guidance for the 2021 financial year of a loss of between $35 million
and $55 million. Although the NZ government remains committed to
restarting Tasman travel as a priority, this guidance assumes that:
‒there will be no material quarantine-free two-way Tasman travel
during the remainder of the 2021 financial year; and
‒no further lockdowns of an extended duration during the period
•In addition, Auckland Airport is revising downwards its FY21 capital
expenditure
16
guidance from $250 million to $300 million to between
$200 million and $230 million. This includes completing existing
roading, runway, baggage system and investment property projects
•No dividend will be declared for FY21
•This guidance is subject to any material adverse events, significant
one-off expenses, non-cash fair value changes to property and any
deterioration due to global market conditions or other unforeseeable
circumstances
Cargo loading at Auckland Airport
16.Capital expenditures net of any impairments and excluding the impact of reduced termination cost provisions. Includes contributions to investments in Joint Ventures (Pullman)
26
Questions
2021
Interim Results
Highlights
Financial
performance
Our continuing
journey
Outlook
Appendix: Passenger numbers
For the six months ended 31 December 20202019Change
International arrivals
65,2102,715,217(97.6%)
International departures
88,7652,574,181(96.6%)
International passengers excluding transits
153,9755,289,398(97.1%)
Transit passengers
33,028547,448(94.0%)
Total international passengers
187,0035,836,846(96.8%)
Domestic passengers
2,636,3794,757,573(44.6%)
Total passengers
2,823,38210,594,419(73.4%)
•Total PAX volumes decreased 73.4% as a result of COVID-19 travel restrictions
•International PAX were particularly impacted, decreasing 96.8% on the prior period
•Domestic PAX volumes decreased by 44.6% on the prior period. During Alert Level 1 periods, domestic PAX
recovered to c.65% of the prior period
28
2021
Interim Results
Highlights
Financial
performance
Our continuing
journey
Outlook
For the six months ended 31 December 20202019Change
Aircraft movements
International aircraft movements
6,76228,616(76.4%)
Domestic aircraft movements
37,97559,974(36.7%)
Total aircraft movements
44,73788,590(49.5%)
MCTOW (tonnes)
International MCTOW
825,8032,914,921(71.7%)
Domestic MCTOW
760,7201,168,864(34.9%)
Total MCTOW
1,586,5234,083,785(61.2%)
•International aircraft movements and MCTOW declined by 76.4% and 71.7% respectively. The reduction was
smaller than the reduction in PAX volumes, as load factors for international travel decreased in response to
COVID-19
•Domestic aircraft movements and MCTOW decreased by 36.7% and 34.9% respectively. This was due to
COVID-19 lockdowns in Auckland, constrained international flow-on traffic, and Jetstar’s withdrawal from
regional services in December 2019.
•Air NZ operated at almost 90% of its pre-COVID-19 domestic capacity during the October school holiday
period
Appendix: Aircraft movements and MCTOW
29
2021
Interim Results
Highlights
Financial
performance
Our continuing
journey
Outlook
Appendix: Associates’ performance
For the six months ended 31 December($m)20202019Change
Queenstown Airport (24.99% ownership)
Total Revenue13.629.1
(53.3%)
EBITDA9.120.4
(55.4%)
Underlying Earnings (AucklandAirport share)
0.62.7(77.8%)
Domestic Passengers
678,836840,628(19.2%)
International Passengers
-417,111(100.0%)
Aircraft movements
5,9199,592(38.3%)
Novotel Tainui Holdings (50.00% ownership)
Total Revenue
12.616.1 (21.7%)
EBITDA
5.86.1 (4.9%)
Underlying Earnings (AucklandAirport share)
17
2.52.3 8.7%
Average occupancy
18
73.0%
95.9%
Average room rate increase
(2.9%)
0.3%
17.On 31 October 2019, Auckland Airport’s investment in Novotel Tainui Holdings increased from 40% to 50%
18.The Novotel Hotel has been solely occupied by the Ministry of Health in the 6 months to 31 December 2020 as a managed isolation and quarantine facility
30
2021
Highlights
Financial
performance
Our continuing
journey
Outlook
Interim Results
Appendix: Balance sheet remains strong
31
As at($m)Dec-20Jun-20Change
Non-current assets
8,433.48,448.7(0.2%)
Property, plant and equipment
6,066.56,060.80.1%
Investment properties
2,094.02,042.72.5%
Other non-current assets
272.9345.2(20.9%)
Current assets
764.2848.5(9.9%)
Cash
682.4765.3(10.8%)
Other current assets
81.883.2(1.7%)
Non-current liabilities
2,039.22,192.8(7.0%)
Term borrowings
1,684.31,824.4(7.7%)
Other non-current liabilities
354.9368.4(3.7%)
Current liabilities
484.3467.33.6%
Equity
6,674.16,637.10.6%
2021
Interim Results
Highlights
Financial
performance
Our continuing
journey
Outlook
Appendix: Underlying profit / (loss) reconciliation
•We have made the following adjustments to show underlying profit / (loss) after tax for the six months ended 31 December 2020 and 2019:
–we have reversed out the impact of revaluations of investment property. An investor should monitor changes in investment property over time as a measure of growing value.
However, a change in one particular year is too short to measure long-term performance. Changes between years can be volatile and, consequently, will impact comparisons.
Finally, the revaluation is unrealisedand, therefore, is not considered when determining dividends in accordance with the dividend policy;
–we have reversed out the impact of fixed asset project write-offs, impairments and termination costs. In response to the COVID-19 outbreak, some capital expenditure projects
were abandoned and fully written off and others were suspended. Some of these abandoned or suspended projects incurred contractor termination costs. The abandonment or
suspension of live capital expenditure projects is extremely rare and is the direct consequence of COVID-19. These fixed asset write-off costs, impairments and termination
costs are not considered to be an element of the group’s normal business activities and on this basis have been excluded fromunderlying profit;
–we have also reversed out the impact of derivative fair value movements. These are unrealisedand relate to basis swaps that do not qualify for hedge accounting on foreign
exchange hedges, as well as any ineffective valuation movements in other financial derivatives. The group holds its derivatives to maturity, so any fair value movements are
expected to reverse out over their remaining lives;
–we have adjusted the share of profit of associates and joint ventures to reverse out the impacts on those profits from revaluations of investment property and financial
derivatives; and
–we have also reversed out the taxation impacts of the above movements in both six-month periods.
20202019
For the six months ended 31 December($m)
Reported profitAdjustments
Underlying
profit / (loss)Reported profitAdjustments
Underlying
profit / (loss)
EBITDAFI per Income Statement
88.2 -88.2 279.2 -279.2
Investment property fair value increase
29.8 (29.8)-9.1 (9.1)-
Fixed asset impairment
-0.9 0.9 ---
Reversal of fixed asset termination costs
-(14.9)(14.9)---
Derivative fair value movement
0.8 (0.8)-(0.4)0.4 -
Share of profit of associates and joint ventures
3.2 (0.1)3.1 5.0 -5.0
Depreciation
(59.3)-(59.3)(55.4)-(55.4)
Interest expense and otherfinance costs
(35.0)-(35.0)(34.7)-(34.7)
Taxation expense
0.4 6.1 6.5 (55.6)1.4 (54.2)
Profit after tax
28.1 (38.6)(10.5)147.2 (7.3)139.9
32
2021
Interim Results
Glossary
33
ACIAirports Council International
AMTNAustralian medium term notes
ARPSAverage revenue per parking space
EBITDAEarnings before interest, taxation and depreciation
EBITDAFIEarnings before interest, taxation, depreciation, fair value adjustments and investments in associates
FRNFloating rate note
HOVHigh occupancy vehicles
IATAInternational Air Transport Association
MCTOWMaximum certified take off weight
MSCPMulti-storey carpark
NPATNet profit after tax
PAXPassenger
PCPPrevious corresponding period
PCRPolymerase chain reaction
PSRPassenger spend rate
PUDOPick up and drop off
USPPUnited States Private Placement
WALTWeighted average lease term
---
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Name of issuer
Reporting Period
Previous Reporting Period
Currency
Amount (millions)
Revenue from continuing
operations
$131.5
Total Revenue$131.5
Net profit/(loss) from
continuing operations
$28.1
Total net profit/(loss) $28.1
Amount per Quoted Equity
Security
Imputed amount per Quoted
Equity Security
Record Date
Dividend Payment Date
Current period
Net tangible assets per Quoted
Equity Security
$4.53
A brief explanation of any of
the figures above necessary to
enable the figures to be
understood
Name of person authorised to
make this announcement
Contact person for this
announcement
Contact phone number
Contact email address
Date of release through MAP
Unaudited financial statements accompany this announcement.
$0.0000
Results for announcement to the market
Auckland International Airport Limited
6 months to 31 December 2020
6 months to 31 December 2019
NZD
Percentage change
-64.9%
-64.9%
-80.9%
-80.9%
Interim Dividend
18 February 2021
$0.000000
n/a
n/a
Prior comparable period
$5.00
Refer to attached media release, unaudited Interim Financial Statements and
Results Presentation
Authority for this announcement
MARY-LIZ TUCK
MARY-LIZ TUCK
027 277 5086
investors@aucklandairport.co.nz
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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