Adelaide Airport Ltd (AAL) has reaped the rewards of increased international flights to lift revenue and markedly boost net profit for 2016/17.
The company said in its annual report released on Monday net profit for the 12 months to June 30 2017 soared to $48.5 million, easily eclipsing the previous year’s $28.6 million.
Revenue improved six per cent to $199.2 million.
In addition to the growth in international flights, the annual report noted a rise in valuations for its investment properties also played a significant role in the improvement.
International passenger numbers grew by 11 per cent, or about 50,000, to 952,000, and Adelaide Airport chairman Rob Chapman said there was “a good chance we will reach the 1 million mark in the next 12 months”.
Adelaide had the fastest-growing international passenger numbers in the country, he said.
Total passenger traffic exceeded eight million for the first time, reaching 8.09 million for the year, although domestic traffic rose only 1.5 per cent and regional traffic declined, with regional capacity falling 1.8 per cent over the year. In May, Sharp Airlines withdrew its Adelaide-Port Augusta services.
The impending start of QantasLink services from Adelaide and Melbourne to Kangaroo Island was one positive in what has been a difficult regional market in the state.
Chapman said other positives for continued growth included the successful start of direct services between Adelaide and Nadi by Fiji Airways in June, the upcoming October 26 start of the seasonal introduction of Boeing 787s services to Auckland by Air New Zealand, replacing Airbus A320s on the route, and plans by Virgin Australia, Cathay Pacific and Qatar to expand existing services.
Meanwhile, Chapman said planning and design work was under way for an expansion of the passenger terminal to include a new international gate and additional retail outlets.
And the $50 million, 165-room Atura hotel project, to be connected to the terminal check-in area by a walkway, was on track to open in late 2018, providing an important new facility for travellers.
The airport lost its Masters hardware outlet, as Woolworths closed the loss-making business, but gained an Aldi supermarket and is signing up a Kennards Self-Storage facility on airport land to further expand the property business.
And work has been completed on the strengthening and widening of key taxiways to accommodate new, larger aircraft.
AAL managing director Mark Young said the advent of new airlines and destinations had boosted international traffic and opened new business and tourism opportunities.
Domestically, the airport had gained “incremental” capacity increases, while Jetstar had opened new routes from Adelaide to the Sunshine Coast and Avalon.
The airport continued to hold discussions with carriers to assess business development opportunities, he said.
Airport management has said previously that, having achieved the ambition of gaining direct services into China, the US West Coast was the next major priority.
The annual report shows showed that, on the revenue front, aeronautic activities accounted for 51 per cent of income at $101.8 million, while commercial trading accounted for 26 per cent at $49.4 million and investment property 23 per cent at $45.3 million.
The airport company increased the fair value of its properties by $25.7 million, which took the pre-tax profit up from $40.3 million to $69.4 million. The latest rise compared with a figure of $16.7 million in the prior corresponding period.
The airport’s operating activities produced a positive cash flow of $52.9 million, up from $37.5 million in the previous year, while total assets edged up to $1.18 billion.
AAL reduced its special dividend to shareholders – mostly superannuation groups – from $45 million to $20 million, but held its preference share payout to $21.6 million.