Hope lies with vaccines as Sydney Airport loss widens

107
August 20, 2021
Sydney
Image: Sydney Airport

Losses at Sydney Airport widened by more than 80 percent to $97.4 million in the first half of 2021 as the nation’s biggest airport braces for a brutal second half.

Passenger numbers at the airport for the first half were down 36.4 percent to 6 million, with international down 91 percent and domestic down 3.1 percent on the first half of 2020.

But the overall fall in passenger numbers blew out to 97.4 percent in July as lockdowns savaged east coast air travel.

READ: Airlines welcome Singapore move to ease travel restrictions.

With Greater Sydney in lockdown until at least the end of September, there are no signs of the situation improving soon and airport chief executive Geoff Culbert is now hoping a surge in NSW vaccination rates continues.

The results come as the airport earlier this week rejected an upgraded $A8.45 per share bid by a consortium of investors that includes industry superannuation giant AustralianSuper.

READ: Sydney airport bidders disappointed with rejection.

“It was a challenging six months, but we were encouraged to see passenger traffic rebound strongly every time borders were open,’’ Culbert said on Friday.

“From January to April, we recovered to 65 percent of our pre-COVID domestic passengers and in just over two months between late April and June, trans-Tasman traffic recovered to more than 40 percent of pre-COVID levels.

“We’re optimistic that this trend will repeat itself as the vaccine program gains momentum and we see a sustained easing of restrictions.”

Earnings before interest tax, depreciation and amortization were down 29.8 percent to $210.8 million with aeronautical, retail and car parking revenue all taking a hit but property and car rental up slightly on an adjusted basis.

The airport has also cut costs, slashing capital expenditure by more than half compared to last year and cutting operating costs by 7.8 percent.

Another plus was that it retained $A2.9 billion in liquidity as of June 30.

The uncertain times meant there was no interim distribution to shareholders for the half and the airport boards were unable to give guidance.

The airport said in its outlook that the trajectory prior to the latest lockdowns and resilience stemming from steps taken over the past 18 months to protect the business provided it with confidence and strongly positioned it to navigate the recovery.

“The pathway to the recovery is clear,’’ Culbert said.

“Governments at all levels are highly motivated to roll out the vaccine, which has now been tied to the lifting of restrictions.

“As border restrictions are eased, international and domestic travel will be back, and Sydney Airport will be ready to go.”