Waikato Regional Airport Ltd reports profit, forecasts growth
Waikato Regional Airport Ltd (WRAL) has declared its second consecutive dividend to its five Council shareholders on the back of improved airport profitability and strong indications of continued growth.
WRAL is a council-controlled organisation owned by Hamilton City, Otorohanga, Waipa, Waikato and Matamata-Piako District Councils. The Group includes wholly-owned subsidiaries Titanium Park Limited (TPL) and Hamilton & Waikato Tourism Ltd (HWT).
At its annual general meeting today WRAL confirmed a total dividend of $250,000 will be paid out to shareholders based on earnings from the 2017/2018 year. Last year was the first time since 2012 that airport operations independent of the wider Group made a profit. Since 2016 WRAL had returned a profit largely on the back of land development.
Overall WRAL reported a strong financial performance, returning a group operating surplus before revaluation gains and tax of $1 million. Operating revenue for the year was $8.6 million, up $1 million on the year prior. This was primarily driven by an 11 per cent growth in airport passenger numbers driving increased revenue from commercial land charges, carparking and concessions.
WRAL's investment property portfolio also increased in value by $1.6m following an end-of-year valuation. This was on the back of a $3.3m gain in the previous financial year. Land sales of $2.2m also contributed to the Group's total revenue. The Hamilton Airport Hotel and Conference Centre was purchased by WRAL in January 2018. Planning is underway to significantly upgrade the facilities during 2019.
HWT, a wholly-owned subsidiary of WRAL, reported a six per cent growth in visitor expenditure and a 10 per cent growth in business tourism events over the past year. Waikato is now the third largest convention and business events destination in the country in a regional industry estimated to be worth $2.6 billion.
During the year the WRAL Board confirmed a 10-year strategic plan aimed at growing aeronautical revenue, developing and optimising land holdings, protecting the core aviation business and continuing to focus on regional tourism volume and value.
Major capital projects for the year included the completion of six conference and meeting rooms within the Hamilton airport terminal building and the initiation of a carpark expansion to provide 85 additional parks to meet forecast passenger growth. There was also a $1.3m project to upgrade fire tenders and rescue fire infrastructure.
The Group's balance sheet remained strong with shareholder equity of $84.9m, up $2.2m on the previous year. This was largely because of the increased value of the Group's investment property.