As Airports Company South Africa celebrates its 20th anniversary this year, the company has been able to look back with pride at its achievements over this period.
Airports Company South Africa invested R17 billion in infrastructure development between 2006 and 2010, providing South Africa with world-class infrastructure of which any nation would be proud. The results of the 2013 financial year were primarily driven by an increase in aeronautical revenue, given that tariffs to compensate for the investment in expansion were only recoverable through tariff increases once the new facilities had been brought into operation.
Debt has been reduced from R16,7 billion (March 2012) to R14,8 billion (March 2013) as the company continues to honour its obligations, while maintaining an optimal capital structure. This has resulted in the reduction of the gearing ratio from 60 percent to 53 percent over this period. The early settlement of a R1,3 billion loan, together with other loan redemptions ahead of time, resulted in the net financing cost for the year being reduced by R1,462 billion, a decrease of 28 percent when compared to that of the previous year.
“During the period under review, total revenue increased by 16 percent to R6,660 billion. Non-aeronautical income, derived from retail operations, advertising, parking, car rental, property and overseas operations, contributed R2,414 billion to the total,” said Maureen Manyama-Matome, Finance Director of Airports Company South Africa.
According to Manyama-Matome, 17,4 million passengers departed from the company’s network of nine airports during the financial year. Encouragingly, international passenger traffic and aircraft landings increased by one percent. However, and disappointingly, the same cannot be reported for domestic travel. The slow recovery in departing passenger numbers clearly demonstrates the lethargic growth that threatens the health of the aviation industry, and projections for the next two years are for minimal growth at best.
Airports Company South Africa is in the fortunate position of being able to optimise efficiencies at the existing airports, including the three-year old King Shaka International Airport, and consequently obviate the need for short-term capital investment in infrastructure development. This does not, however, detract from the need to plan for expansion to cater for the inevitable future growth in passenger and flight numbers. This will consist of investments that are essential and those that are dependent on market conditions. Taking account of the harsh economic climate endured by the aviation industry, in particular by airlines, due recognition of the industry’s appetite for development will play an important role in the timing of infrastructure development.
“Airports Company South Africa will continue with its efforts to enhance the group’s income from non-aeronautical revenue. This drive will be augmented by a new property development strategy to unlock the organisation’s valuable, non aviation-related property assets.
“Successes in India and Brazil will inform a new focus on opportunities in emerging markets. Airports Company South Africa, in collaboration with the South African Government, will pursue viable business opportunities in Africa. Depending on the success of these ventures, the company will be able to reduce its reliance on aeronautical income,” said Manyama-Matome.