Sydney Airport CEO pleased with “resilient” full-year results

Sydney Airport CEO Geoff Culbert has remained upbeat about the company’s full-year results against what he says were “some of the toughest trading conditions we’ve seen since the financial crisis”.

Australia’s busiest airport posted an after-tax profit of $215 million for 2019 – down 42 per cent on the previous year.

However, its earnings before interest, taxes, depreciation, and amortisation (excluding other expenses) grew four per cent over the 12-month period to $1.3 billion, while revenue rose 3.5 per cent to $1.6 billion.

Looking at the segments, revenue for Sydney Airport’s property and car rental operations grew 5.5 per cent, retail was up five per cent and aeronautical rose 2.4 per cent, while revenue from its car parking and ground transport operations fell by 0.1 per cent.

During 2019, overall passenger traffic at Sydney Airport increased by 0.1 per cent to 44.4 million people, with international passenger growth of 1.1 per cent and a decline in domestic passengers of 0.5 per cent.

Commenting on the airport’s full-year performance, Culbert said: “We are pleased with the result we’ve been able to deliver for 2019 in a year that was characterised by some of the toughest trading conditions we’ve seen since the financial crisis.

“The fact that revenue grew by more than three per cent and EBITDA by four per cent in a year when passenger traffic was flat speaks to the diversity and resilience of this business, prudent cost control, and the quality and focus of our entire team.”

“Underpinning the result was the contribution of our retail and property portfolios.”

Heinemann Australia recommits for next decade

Sydney Airport also announced a renewed duty-free contract with Heinemann Australia, taking their partnership to the end of the decade.

The new deal will see improved terms per square metre from 1 January 2019 and run to 31 December 2029.

Previously allocated lease space will be returned to Sydney Airport, allowing for the operation of an additional five new standalone luxury tenancies.

The hand back of space will trigger the re-development of the entire duty-free precinct, with construction of the revised configuration, including realignment of common walkways and raising of the ceiling, to commence in early 2020.

Mid-2021 is the targeted opening date for the new boutiques, along with an enhanced and optimised layout of the central duty-free stores.

“We are very pleased with the partnership we have with Heinemann and this new, long-term agreement reflects the significant and ongoing retail growth opportunities at the airport,” Culbert said.

“The enhancements that we are planning with Heinemann are exciting because they will both improve the customer experience and position the duty-free offer for growth.”

CEO promises “strong, stable, resilient growth”

In the wake of Australia’s bushfire crisis and in the face of the ongoing coronavirus outbreak, Culbert assured Sydney Airport’s investors of its resilience and proven ability to recover quickly from one-off disruptions and economic shocks.

“Through our nearly two decades as a listed entity, Sydney Airport has weathered many significant global events,” he said.

“We will continue to put our passengers, employees and local communities first while delivering strong, stable, and resilient growth. We have a proven history of performance and growth through all economic cycles and disruptions.

“We will constantly seek ways to raise the bar for our customers in a safe and sustainable way, while looking for growth opportunities across both aeronautical and commercial businesses and spending each dollar prudently.

“We will continue to invest for capacity growth with some exciting projects underway in 2020. Our focus will be on delivering for our customers and we are committed to doing so with a mind to a sustainable future for Sydney.”

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financial results full-year results Geoff Culbert Heinemann Australia sydney airport