Sydney Airport’s H1 loss nearly doubles amid low travel

by Jonathan Adams
Sydney Airport

The US$69.41 million net loss at Australia’s biggest airport operator for the six months this year compares with the US$38.20 million loss reported last year

Sydney Airport Holdings Pty Ltd reported on Friday that its first-half loss nearly doubled in a tough period for travel demand. It comes days after it rejected an improved A$22.8 billion (US$16.3 billion) buyout offer from a consortium of infrastructure investors.

The A$97.4 million (US$69.41 million) net loss at Australia’s biggest airport operator for the six months ended June 30 compares with the A$53.6 million (US$38.20 million) loss reported last year.

Earnings before interest, tax, depreciation and amortisation dropped 30% to A$210.8 million (US$150.22 million) in the first half, below the Visible Alpha consensus of A$228.6 million (US$162.90 million) cited by broker Jefferies.

The company has said it may consider a higher buyout offer from the Sydney Aviation Alliance (SAA) consortium of IFM Investors, QSuper, Global Infrastructure Partners and AustralianSuper after rejecting an improved proposal of A$8.45 (US$6.02) disclosed on Monday.

The board is not philosophically opposed to a deal, but the first priority is to assess it on the basis of price, Sydney Airport CEO Geoff Culbert told analysts.

Citi analysts expect distributions will be suspended until June 2022 due to a slow recovery from the pandemic, which has closed Australia’s international border and led to domestic travel restrictions.

Sydney Airport’s international traffic was down 91% in the first half from last year’s levels, which had been less affected by the pandemic in the first quarter. Domestic traffic declined 3.1% compared with 2020 but was down 57.5% on 2019 levels.

The impact of COVID has been severe, but it will pass, Culbert said, noting international border controls could relax as early as December based on rising vaccination rates. The underlying fundamentals of the business haven’t changed.



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