Airport Development Group (NT Airports)

AIX interest in NT Airports

28.2%

NT Airports owns and operates Darwin International Airport, Alice Springs Airport and Tennant Creek Airport. Darwin Airport forms an important hub for low-cost carriers, creating a vital link between Australia and Asia, as well as being the key entry point into the Northern Territory. Alice Springs Airport similarly forms an essential gateway to Central Australia for both domestic and international travellers. NT Airports also has a substantial land holding, for which development opportunities are currently being pursued.

Performance highlights 2011

NT Airports generated total revenue of $75.1 million and EBITDA of $48.2 million for the 12 months to 30 June 2011, representing increases of 10.0 percent and 8.7 percent, respectively, on the prior year.

The improved earnings were driven by growth in passenger numbers, with a total (including transfer and transits) of 2.9 million passengers having been serviced by NT Airports over the financial year, an increase of 3.7 percent on the prior year. The growth in passenger numbers was particularly strong through the international terminal at Darwin Airport, with a 19.4 percent increase over the prior year, driven by the popularity of low-cost services to South-East Asian destinations, particularly Bali. The domestic terminal at Darwin Airport also performed well, with passengers increasing 5.4 percent on the prior year, supported by the continued strength of Australia's resources sector. In contrast, passengers through Alice Springs Airport declined 6.4 percent compared to the prior year. The strong Australian dollar has resulted in Alice Springs experiencing a reduction in popularity for both domestic and international tourism. The recent natural disasters in Japan have also adversely affected Alice Springs, with Japan being a major market for tourists to the area.

Passenger growth was a driver for the increased trading revenues from duty free, car rental and car parking, which were 13.5 percent above the prior year. Trading revenues also benefited from development of further car parking facilities, as well as the high-quality services provided by NT Airports' retail partners, including JR Duty Free. This was further supported by strong non-aeronautical revenues, with property income increasing 10.3 percent on the prior year, largely due to the increase in rental yields following a market review of the leases.

As well as aeronautical development, NT Airports is pursuing opportunities to develop its considerable land reserves. At Darwin Airport, construction will shortly be completed on purpose-built accommodation for the Australian Federal Police, while negotiations continue for the design and construction of canine facilities. At Alice Springs, a solar power station was completed in September 2010, and agreement was reached for the development of Australia's first aircraft storage facilities.

Performance outlook

In October 2010, NT Airports reached a long-term agreement with its key airline partners, which provides certainty on aviation pricing to support the investment of more than $100 million into airport facilities over the next 10 years, including $33.5 million into the terminal expansion at Darwin Airport. Darwin Airport expects continued growth in the medium term, through both its domestic and international terminals. While the airport forms an important hub for low-cost carriers servicing destinations into South East Asia, Darwin continues to increase in popularity as an end destination, supported by both the tourism and resources industries.