Sydney airport’s EBITDA up by 12.1% in 2010

EBITDA was AUD773.3 million, excluding specific expenses, which represents an increase of 12.0% over the previous corresponding period. MAp's CEO Kerrie Mather, stated: "Sydney Airport has delivered an outstanding performance for 2010. EBITDA growth ... has been driven by the completion of a significant multi-year investment programme across the business, solid increases across all revenue streams and strong traffic growth."

Table 1: Sydney Airport financial/traffic highlights, 4Q2010

Table 2: Sydney Airport financial/traffic highlights, 12 months ended 31-Dec-2010

With this full-year result, Sydney's EBITDA margin settles at 82.26% for 2010, easily the best performer of any airport reported in Airport Investor Monthly's EBITDA margin performance tables. In the three months ended Sep-2010 it exceeded 83%.

In both the reporting periods, aeronautical, retail, property and car rental, ground transport and commercial services all recorded substantial growth, the only exception being aeronautical security recovery, which fell slightly.

Significant investment projects completed

According to a MAp statement, total revenues increased by 10.5% to AUD943 million for the year. Fourth quarter revenues benefitted from approximately AUD3 million in non-recurring property revenues. Aeronautical revenues increased by 12.1% to AUD468 million for the year reflecting the completion of significant investment projects coupled with strong passenger growth.

During 2010, Sydney Airport welcomed new airlines and services including Air Mauritius and Brindabella Airlines. Capacity increases are set to continue with Hainan Airlines' commencement of services between Sydney, Shenzhen and Hangzhou in Jan-2011 and Qantas' Sydney-Dallas/Fort Worth service which begins in May-2011. This brings the number of North American destinations served non-stop from Sydney to five, the most extensive North American network of any Australian airport.

No longer the fastest growing MAp airport

The only negative aspect to report in terms of traffic development, if it can be considered one, is that in 2010 Sydney Airport lost its title of fastest-growing MAp airport, which it has held for some time, to Copenhagen Airport, which has latterly benefitted from the opening of a low-cost terminal and resurgence of activity by SAS. Some 21.5 million passengers passed through Copenhagen during 2010, only slightly below the 2008 record, and the full-year growth of 9.1% ranked among the highest for all European airports.

Table 3: Comparison of traffic growth at MAp airports in 2010

Retail revenue at Sydney increased by 10.5% for the year to AUD212.9 million, ahead of international traffic growth of 6.9% and 7.8% overall. Performance was particularly strong from the specialist shops and food and beverage operations. Underlying growth in property and car rental revenue was approximately 5% in 2010.

Ground transport and commercial services revenues grew by 7.9% for the year reflecting the strong traffic growth. MAp stated "passengers have responded positively to several new initiatives including an upgrade of the taxi holding area and introduction of 15 minutes' free parking at the International Terminal".

Per passenger operating expenses reduced by 3.7%

Total operating expenses (excluding specific items) increased 4.3% to AUD167 million for the year. The comparison with the p-c-p is affected by AUD2.6 million of non-recurring benefits in the third quarter of 2010 and AUD1.1m of incentive savings in the first quarter of 2009. Excluding recoverable security expenses, operating expenses (excluding specific items) declined by 3.7% on a per passenger basis.

Following "successful completion" of two major projects - the International Terminal redevelopment and the runway safety works - capital expenditure for the full year was AUD136 million. But this is a reduction of almost 55% on the p-c-p and may reflect continuing indecision on the progress of a second Sydney airport.

In 2010, Sydney Airport successfully completed the refinancing of approximately AUD1.9 billion of senior debt. This included a debut unwrapped AUD bond issue and the first ever issue by an airport in the US144a market. Sydney Airport now has no debt maturities until the final quarter of 2013.