654654 Airports Company South Africa
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ACSA boosts revenues by 16% to R1,3 billion, net profit after tax by 15% in ‘very trying conditions’
Thursday, August 22, 2002 | 00:00

Airports Company South Africa Limited increased its revenues by 15,8% to R1,335 billion for the financial year ended March 31, 2002, from R1,153 billion last year. Profit before taxation rose to R593m (2001: R537,2m) and net profit for the year grew by 14,7% to R409,8m (R357,3m) after making provision for taxation of R182m (R179m).

Earnings per share rose to 81,96 cents from 71,47 cents and the company declared a dividend of 21,0 cents a share (13,6cents), amounting to R125m (R105m).

Most of the revenue growth occurred in non-aeronautical revenue (including income from retail and property activities and hotel management) which rose by 20,8% to R637,8m (R528m), as against aeronautical revenue, which rose by 11,6%.

Monhla Hlahla, managing director, comments that revenue from non-aeronautical sources now makes up 48% of total revenues, vindicating the company's long-standing strategy of actively developing alternative sources of revenue, which have grown by 408% over the past five years.

"Despite the tragedies of September 11,2001, the commercial portfolio did particularly well, showing strong growth in a harsh environment. In doing so, it assisted the aeronautical component of the business, which had to weather the impact of a global slow-down in air travel," she noted.

Ms. Hlahla added that the improved financial performance in very trying market circumstances indicated the company's continuing commitment to growing shareholder value through achieving traffic growth, seizing new opportunities, diversifying income streams and improving capex management.

ACSA maintained its focus on customer service by continuing to provide world-class airport infrastructure while applying rigorous standards of safety and security. According to its annual financial statements for the year to 31 March 2002, the company spent R553m (R731,7m) on capital expenditure for improvements and expansions to its facilities during the year.

The chairman of the board of ACSA,Mashudu Ramano, said that, despite the strong downturn in the global air travel industry, which saw the largest-ever annual decline, passenger numbers at ACSA airports held steady at about last year's levels. He noted that aircraft landings had increased by 14 244 to 211 238 although the number of airlines using ACSA airports had declined from 52 to 47.

"This may be partly due to the fact that South Africa is seen as a relatively safe destination for global tourism following the tragic event of September 11 last year. South Africa is also emerging as an important event and conference venue, as is illustrated by the number of international conferences held last year", Ramano said.

ACSA's results show that it had improved its efficiently, increasing EBITDA (earnings before interest, depreciation and amortisation) by 11% to R735m ((R663m). Detailed productivity indicators show that revenue per employee rose by 10,8% whilst operating profit per employee climbed by 4,7%. The number of departing passengers per employee declined slightly to 5 725 from 5 951.

The ongoing upgrading and improvement of infrastructure remains a key element of ACSA's status as a world-class airports company and ACSA completed a number of large capital projects during the year.These include the Sun Intercontinental Hotel, the SA Post Office mail facility and the international arrivals terminal at Cape Town International Airport.Work in progress includes construction of the impressive new domestic terminal at O.R. Tambo International Airport.

"Safety remains a priority, and the company has introduced a comprehensive safety management system on the air-side for the first time. It has developed safety procedures for every activity air-side and is currently training all relevant staff to implement them.

Working in partnership with the SAPS,the SARS, SAA and the Department of Home Affairs, ACSA conducted a zero tolerance campaign against crime at all its airports, resulting in a 35% drop in crime. The campaign has also had the effect of entrenching security consciousness among all airport staff", Ms. Hlahla said.

The company's annual financial statements show that, while lagging slightly behind targets, ACSA had continued to make progress in its Black Economic Empowerment initiatives. The new domestic terminal at ORTIA succeeded in achieving BEE participation of 40% through a joint venture.

The executive approved a new retail concession procurement framework which set a hurdle of 51% BEE in all retail tenders. In December 2001 and January 2002 all new retail concessions at ORTIA and CIA were evaluated, showing that nearly all tenders awarded met this criterion.

The managing director noted that ACSA had acquired a large pool of skills in the multiple facets of airport management: "We believe that this expertise should be made available to support the development of sustainable aviation industries in Africa and the developing world. In the years ahead, ACSA will seek partnerships with other airports authorities in Africa in particular. Our newly created airports management solutions business unit is already in negotiations with such authorities. We are proud that this will advance the NEPAD programme at the same time as it opens new business opportunities for ACSA."

In conclusion, Ms. Hlahla remarked that events such as the World Summit on Sustainable Development in Johannesburg in August are a challenge, and a huge opportunity, for ACSA. This world event will showcase South Africa and ACSA is more than prepared to contribute to the success of the event: "Growing traffic is one of the major challenges facing the travel and transport industries in South Africa and the region. Efforts must be intensified to bring more tourists and business travellers to this beautiful country through innovative products" 

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