Airways New Zealand annual result - SUMMARY

AUCKLAND (Airways New Zealand) - The State Owned Enterprise, Airways New Zealand, has announced its annual result for the twelve months to 30 June 2005.

The company achieved an Economic Value Added (EVA*) result of $3.3 million, (compared to $3.0 million in 2003/04), which is an after tax profit of $8.2 million. The result included $798k EVA from the International and Technical Ventures Division.

In achieving this result, Airways returned a total of $10 million in dividends to its Shareholder, and $5.6 million in rebates to its customers.

Airways Chairman, Mr Con Anastasiou, says the 2004/05 year was one in which Airways again demonstrated to the international aviation industry its ability to perform to world-class standards of profitability and practice.

"This result once again demonstrates the effectiveness of Airways' value-based commercial model, as a vehicle for continued performance improvements which enable us to deliver tangible benefits to our customers and appropriate commercial returns to our shareholders", said Mr Anastasiou.

"This performance has only been possible as a result of the dedication of Airways' people who have once again performed to an exemplary standard."

Safety Performance

Airways continued to improve on its already excellent safety record, continuing the trend of the last nine years. Airways continues to benchmark its safety performance against air navigation services (ANS) providers in other countries, a process that has confirmed its place among the world's top ANS providers.

Operational Performance

Airways achieved or progressed all of its domestic performance objectives as set out in its Statement of Corporate Intent. These objectives included: successfully completing factory acceptance tests for three secondary surveillance radars and a site acceptance test of the first secondary surveillance radar; putting in place the systems and resources necessary to move towards zero service outages due to the performance of critical systems; and completing the plan for implementing the relocation of Ohakea radar services to Christchurch.

Financial Performance

Airways exceeded its financial targets to achieve a Group EVA of $3.3 million, and a conventional net profit after tax result of $8.2 million enabling it to deliver a 20% after-tax return on equity to its Shareholders. Airways has maintained its strong balance sheet with total operating assets of $98.6 million and a gearing of 35%.

*(EVA measures the extent to which a business is performing above or below expectation. A positive EVA means the business is adding value after allowing for a market return to the providers of the capital.)

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