ACSA ON A SUSTAINABLE GROWTH PATH
• Revenues rise 5,3% to R1,9 billion
• Headline earnings up 26% to 118,63c
• Contribution to fiscus through tax grows 16% to R283 million
• EBIDTA up by 2,3% to R1,2 billion
Airports Company South Africa’s (ACSA) performance for the financial year to end-March 2005 has set a solid platform for continued solid and sustainable financial performance leading to South Africa’s hosting of the 2010 Soccer World Cup, and beyond.
Announcing the Company’s results today (30 August 2005), ACSA Managing Director Monhla Hlahla, reported a 5,3% rise in revenues to R1,9 billion profit before taxation up 22% to R593,2 million; 9,3% rise in total assets off the back of capital expenditure of R492 million (2004: R473 million); and a positive cash balance of R68,7 million.
Ms Hlahla noted that over the past five years, ACSA had paid R891 million in dividends to its shareholders, with the government of South Africa receiving 74,6% (R664,7 million). Over the same period, ACSA also contributed taxes to the fiscus amounting to R1,1 million – R282,7 million in the review period, some 16% more than in the previous financial year.
“This means ACSA has contributed about R2 billion to the national government – a sizeable contribution to government’s financial resources to invest in key socio-economic priorities,” she said.
Cash flow from operating activities increased by 60% to R732,2 million. This performance was underpinned by a 16% increase in cash generated by operations to R1,28 billion and decreases in the interest cost as well as the dividends paid.
Following the repayment of long-term borrowings amounting to R88,7 million in 2004, the Group fully repaid two of its facilities during the current financial year.
However, as a result of the capital expenditure programmes – over R3 billion was invested in capital projects over the last five-year period, and it is projected that it will invest an additional R5,2 billion in the next five years – various short to medium-term facilities have been negotiated with the Group’s long-term borrowings increasing from R99 million to R270 million, sufficient to meet its capital expenditure plans and distributions. The envisaged capex investment for the Company for 2006 is R1,2 billion. (see second release).
“ACSA’s gearing nevertheless remains low at 7,9% (2004: 6%),” Ms Hlahla stated.
“Apart from capital expenditure, ACSA continues to invest heavily in security as well as in maintaining or improving service standards. As encapsulated in our mission, vision and values, ACSA aspires to be a world-class leader in the aviation industry. To achieve this aim and ensure that excellent services are sustainable, we have introduced a Quality Management Survey, a monitoring system that objectively benchmarks our comprehensive service performance in areas of safety, security and customer service against global standards. This enables us to detect areas of weakness at an early stage so that they can be addressed quickly and effectively,” she added.
The success of these efforts is reflected in the fact that the ACSA’s three flagship enterprises, Johannesburg (ORTIA), Cape Town (CIA) and Durban (DIA) International Airports, have once again been recognised in the AETRA awards programme.
CIA, voted Africa’s Leading Airport at the Annual World Travel Awards for six consecutive years (1998 – 2003), was ranked second-best airport in the Region (Middle East and Africa) in the AETRA Awards, and third in the category Best Airport (five to 15 million passengers).
DIA, which has won four AETRA awards over the past three years, was ranked third-best airport in the AETRA Regional Ratings and fifth-best airport in the world for nil to five million passengers. It was rated fifth in the world in the category for Overall Satisfaction-Domestic Airport.
ORTIA, which has won the Skytrax Best Airport in Africa for three consecutive years, was adjudged fourth-best airport in the Region.
“Another award of which ACSA is especially proud is its naming as the top performer in the transport sector in the 2004 ‘Top 300 National Business Awards’. Nomination criteria for these awards include growth, export and trade orientation, contribution to Black Economic Empowerment and Transformation, contribution to job creation and the economy, and overall quality of performance,” Ms Hlahla said.
“ACSA has always been committed to BEE and human capital development, and we are therefore particularly proud of our three-year Women’s Empowerment Programme which is aimed at equipping female employees with appropriate technical and business skills needed for future leadership positions in the aviation industry which is still largely a male preserve.”
Another area of satisfaction for ACSA management is the success of its efforts to diversify its revenue streams. ACSA generates revenues from two sources: aeronautical and non-aeronautical.
Its traditional aeronautical revenues – up 6,2% year on year in FY04 – comprise primarily landing fees charged to the airlines as well as passenger service charges. This is largely the result of an increase in total aircraft movements to 218 603 (2004: 212 935), while the number of departing passengers grew by 12% to 13,3 million (2004: 11,9 million).
Interestingly, domestic passenger numbers grew significantly to 9,2 million from 8,1 million in 2004 – an increase of 14% – while international passenger numbers grew marginally to 3,7 million (2004: 3,4 million).
ACSA’s second revenue source comprises non-aeronautical or commercial activities such as retail, property and advertising.
Non-aeronautical revenue now accounts for a significant 45,5% of ACSA’s total revenue, and contributed a total of R892,5 million to the Company’s bottom line in FY04.
“We are confident that the implementation of a new regulatory model, which will address the issues that led to the clawback of R127,1 million on tariffs during the review period, will provide a sound base for ACSA’s business going forward.
“Indeed, despite the uncertain regulatory environment, the Company’s performance over the last financial year was pleasing and set a good platform for continued good financial performance leading up to South Africa’s hosting of the 2010 Soccer World Cup. We will, however, continue to focus on those areas that will ensure we continue to deliver on all aspects of our mandate,” Ms Hlahla concluded.