Airports Company South Africa reports R1 billion loss amid buyout reports

Airports Company South Africa (ACSA) on Thursday (15 September) reported its financial results for the year ended March 2022, which it says largely reflect a difficult operating environment for the group following the Covid pandemic and last’ year’s civil unrest.

Revenue was R3.9 billion for the 12-month period, up by 81% from the R2.2 billion reported in the previous financial year. The company said it narrowed its losses to R1 billion, from a loss of R2.6 billion in 2020/21.

Chief executive officer Mpumi Mpofu reflected that even though this year’s performance has been much better than the previous year, the persistently tough operating environment has somewhat slowed down recovery.

She said that the recovery that occurred during the reporting period was supported by a gradual and intermittent recovery in passenger numbers in comparison to the previous year.

“As severe travel restrictions began to be lifted both at home and abroad, the demand for air travel increased. The ACSA network recovered to 49% of its pre-Covid passenger throughput by 31 March, 2022,” said Mpumi.

#ACSAAnnualFinancialResults2022 pic.twitter.com/kcXv0rQXmC

— Airports Company SA (@Airports_ZA) September 15, 2022

The results come amid reports that a number of prospective investors have expressed an interest in buying a stake in the company, but transport minister Fikile Mbalula has said that it’s not for sale.

Domestic travel accounted for 83% of passenger traffic during the reporting period. “We are still experiencing 30% fewer volumes than in pre-Covid-19 travel, but the domestic market has been instrumental in driving our performance during the period under review,” said the chief executive.

“In contrast, international traffic, hampered by the impact of the Omicron variant in the third quarter of the financial year, only recovered to 28% of its pre-pandemic level.”

Aircraft landings increased by 105% to 176,816 from 86,434 in the previous year, and departing passenger numbers improved by 131% to 10.5 million from 4.6 million.

Mpumi said that aeronautical revenue improved significantly by 121.7%, to R1.8 billion (up from R810 million) due to the increase in aircraft landings and departing passenger numbers during the period.

Non-aeronautical revenue increased by 57.1% to R2.1 billion, from R1.3 billion in 2021. This improvement was due to increased passenger numbers, as well as the lifting of certain trade restrictions during the various levels of lockdown.

Total revenue from non-aeronautical sources takes into account rental revenue reprieves of R591 million (2021: R1.4 billion) granted to tenants to offset the negative impact of the pandemic.

Retail revenue increased by 95.8% to R607 million (2021: R310 million) due to increased traffic volumes. This should, however, be seen within the context of a reduction of 15.1% in retail revenue per passenger to R57.56 (2021: R67.77), meaning there was less spend per passenger.

Capital Expenditure for the year amounted R546 million (2021: R770 million) and remained limited to maintenance and refurbishments informed by statutory requirements. The group continues to identify efficiencies in its operations, keeping operating expenditure to a bare minimum, t said.

Operating expenditure increased by 3.9% to R2 billion (2021: R1.9 billion).

ACSA said it will continue to monitor the local and international business environment to determine appropriate responses to challenges that may arise and to ensure the company’s long-term financial sustainability.

“The results for the reporting period demonstrate ACSA’s resilience in the face of the unprecedented crisis precipitated by ongoing lockdowns, travel restrictions and the need to dramatically scale back operations. The results clearly indicate that the business is firmly in a recovery phase.

“Going forward, we will continue to diversify our revenue streams and to focus our activities on the Growth Strategy which includes commercial and cargo strategies,” said the group’s chief executive.

Read: Billionaire wants to buy South African airports: report