There’s no talk of a downturn at Queenstown Airport Corporation – six-monthly profits have virtually doubled.
The Queenstown Lakes District Council-owned company recently reported pre-tax profits of $2.86 million for the December 31 half-year – up 96 per cent over the same period previously.
“It’s a healthy financial result in an uncertain environment,” QAC’s report says.
The composition of the result indicates a well-run business – the numbers improved almost all the way from the top line to the bottom.
Revenue is up six per cent, with aviation putting another $684,000 in the till and “commercial operations” – mainly retail rents and parking – an extra $138,000.
Aviation benefited from increased flights and passenger loadings, together with good weather creating fewer diversions and thus preserving landing fees.
The number of scheduled flights was almost unchanged over the period at a total of 2254 landings – but passenger numbers went up a healthy 12 per cent.
Those extra 45,000 passengers comprised two-thirds of domestic flights and one-third from trans-Tasman services.
On the payout side, QAC appears to be controlling most costs well.
Stand-out items are interest costs slashed by $390,000 or 31 per cent, and “other operating costs” down 46 per cent or $750,000.
While staff costs are up by $111,000 or 22 per cent, “total operating cost” has been cut by $1m – 22.5 per cent – which is no mean feat.
Despite highlighting 22 international flights per week during the coming winter, and forecasting full-year profits of $3.1m to $3.7m over 2011-13, QAC’s board repeats its mantra about dividends being unlikely.
This is because forecast capital expenditure of $16.5m during the 2011-13 period will require increased levels of debt.
A huge chunk of that capital expenditure will be for “runway end safety areas” – or RESAs.
These provide buffer zones on ZQN’s short runway, and are required by civil aviation law to be ready by October 2011.