Aviation

Sydney Airport’s half-year profit plunges after taking $182m tax hit

Huntley Mitchell

Huntley Mitchell

Sydney Airport has suffered a huge drop in profit for the first six months of the 2019 calendar year, compared to the $173.2 million profit it posted in the prior corresponding period.

The profit slide was due to a $181.7 million tax bill over the 2011 sale of Copenhagen Airport, while the matter remains unresolved in the Danish High Court.

Sydney Airport’s half-yearly revenue rose 3.4 per cent to $797.1 million, with its aeronautical division enjoying 4.7 per cent growth, its retail division experiencing 4.0 per cent growth and its property and car rental division posting 1.8 per cent growth.

The company’s parking and ground transport business was the only division to see a fall in revenue – down 1.4 per cent compared to the first half of 2018.

Sydney Airport’s earnings before interest, taxes, depreciation and amortisation increased by 4.1 per cent to $649.2 million.

The number of passengers at Sydney Airport dropped slightly in the first half of 2019 – down 0.2 per cent to 21.6 million – due to a 1.5 per cent decline in domestic passengers, while the number of international passengers grew 1.9 per cent.

Sydney Airport CEO Geoff Culbert blamed the decline in domestic passengers on capacity reductions and subdued demand, and attributed the rise in international passengers to strong flows from the US, India, Vietnam and Japan.

Culbert also noted the strong performance of the airport’s duty-free and speciality stores, with a lift in advertising revenues reflecting its investment in new digital advertising.

“Sydney Airport is a business that continues to perform well across the cycle, and this half was no exception,” he said.

“We see ongoing opportunities for growth in our aeronautical and non-aeronautical businesses. and our investment program will continue to deliver capacity and great experiences for our customers.”

Shares in Sydney Airport opened 1.9 per cent lower to trade at $8.21 on Thursday.

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