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Business Description: Auckland International Airport Limited (AIA) is a New Zealand-based company providing airport facilities and supporting infrastructure in Auckland, New Zealand. AIAâ€™s core operations are aeronautical activities, on airport retail concessions and car parking facilities, standalone investment properties and other charges and rents associated with operating an airport. AIA also holds investments in companies operating in airport and related businesses located in New Zealand and Australia.
Strategy Analysis: The strategic growth priority for airport is to grow its aeronautical and retail income through meaningful passenger growth over the longer term. Management is actively engaging with aircrafts and is looking at ways and means to increase passenger capacity out of Auckland in a significant manner. It has been quite successful of late in enticing major Trans-Tasman and some long haul carriers to Auckland. We estimate capacity out of Auckland will rise by approximately 1.3m as a result. This is likely to spur international passenger growth over the next 2-3 years. Queenstown and NQA have delivered good results and are ahead of managements target in terms of passenger numbers. The goal is to extract meaningful returns out of those acquisitions through route development and other strategic initiatives. We donÂ´t see the company making any further acquisitions for the foreseeable future.
In the medium term management is intent on giving a thrust to its property business and has planned major property related capital expenditure over the next few years to capitalize on its massive land bank. Management sees immense opportunities to lift revenues in this business and has set itself a target of doubling revenues by FY14.
On the aeronautical front, the company is thinking about investing in the domestic terminal to increase capacity and alleviate traffic congestion. It proposes to invest $100-150m in phase 1 to build a new integrated domestic terminal and taxiway alongside the international terminal. This will take 3 years to build. In the interim the firm is considering making minor investments of $15-20m to tide over near term capacity issues. AIA intends to recover this cost by passing it on to passengers. Phase 2 of the plan will be implemented after 3 years and involves the second part of a new integrated terminal alongside the international terminal, a northern runway and taxiway system. The firm then proposes to close the existing domestic terminal. While the cost for the second phase wasnÂ´t revealed we think it could be in the order of $100-150m as well.
Auckland Airport reported NPAT up 11.3% to NZ$76.91m for the half-year ended 31 December 2012. Revenue from ordinary activities were NZ$223.55m, up 3.6% from last year. Basic and Diluted EPS were 5.82 cents compared to 5.22 cents last year. Net operating cash flow was NZ$93.22m compared to $94.23m last year. The interim dividend declared was 5.75 cents, compared with 4.4 cents last year.
Nick Swales, Regional Director, Newcastle Office, Rathbones 27/10/2014 |
â€śIf you want to have a better performance than the crowd, you must do things differently from the crowd.â€ť Sir John Templeton.
Ric Spooner (Chief Market Analyst, CMC Markets) 20/10/2014 |
Today, Australian investors will not have to go it alone buying stocks as they did for much of last week. Bargain hunters this morning will be supported by the morale boosting encouragement of a 3% turnaround in the German Dax and a 264 point rally in the Dow Jones.
Carl Richards, director of investor education at the BAM Alliance 17/10/2014 |
â€śAs odd as it may sound, the sooner you start treating your investments like you treat life, the happier youâ€™ll be with the outcome.â€ť
William H. Gross, Janus Capital Group 16/10/2014 |
â€śFinancial markets are artificially priced. In the bond market, there is nothing normal about a three year German Bund yielding â€śminusâ€ť 10 basis points.â€ť
CMC Markets 8/10/2014 |
Share market indices around the globe are breaking down. While analysts cast around for reasons, itâ€™s clear that a time factor is in play. Simply put, many investors â€śfeelâ€ť a correction is overdue. How low could it go?
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