AUSTRALIA. Retail was the stand-out performer in Sydney Airport’s first-half results announced today.
The sector delivered +14.3% revenue growth year-on-year to A$162.6 million (US$129.1 million) for the period ended 30 June, representing a 23% share of the airport’s total revenue (Note: The Moodie Davitt Report is in Sydney to produce a major feature on the transformation of Sydney Airport’s commercial offer. It will be published in our October Print and Interactive editions.).
“As a result of the most significant investment programme since privatisation, passengers are enjoying a vastly improved customer experience, with additional seating closer to gate, new terminal wayfinding, increased natural light and enhanced retail offerings. We’re delighted that this is being reflected in improved airline service ratings and customer service scores.” – Sydney Airport Managing Director and Chief Executive Officer Kerrie Mather
This compared with a +7.7% rise in aeronautical revenues. EBITDA improved by +7.7% on passenger growth of +3.6%. International passenger traffic rose by +7.7%.
Property and car rental rose +3.3% to A$106.6 million (US$84.7 million), a 15% share. This moderate growth will be enhanced in the second half by hotel revenues from the newly opened Mantra hotel and the Ibis airport hotel acquired in July. Parking and ground transport revenue edged ahead by +2.2% to US$77.1 million (US$61.2 million), an 11% share.
The stellar retail performance was aided by the completion of the International Terminal (T1) luxury precinct and the opening of additional stores in Pier C. The new duty free offering from Gebr Heinemann delivered strong growth, the airport company said.
Food & beverage revenues were boosted by the completion of the upscale City View precinct in T1 and the T2 (domestic) food court in late 2016, with leasing complete and all outlets opened by February 2017. The staged opening of the ambitious Marketplace in the international terminal is due for completion in the second half.
Sydney Airport Managing Director and Chief Executive Officer Kerrie Mather said the airport had delivered another strong result for the half year. “We continue to deliver on our strategy of investing in a significant improvement in customer experience and capacity to support our airline partners’ growth,” she said.
“Our capex programme over the last 12 months has delivered nearly A$400 million in improved facilities for passengers and airlines, with over A$250 million more to be delivered in the second half of 2017.
“EBITDA grew +7.7% on passenger growth of +3.6%. Key drivers of the result were international passenger growth of +7.7%, returns on capital investment in aviation infrastructure, and a strong contribution from retail due to solid trading and new shop openings in T1 and T2.”
Mather added: “The inbound tourism market has seen strong growth of nearly +10% for the half and the rolling 12 months, with excellent performance from a diverse range of major Asian markets, including China, India, Philippines, Indonesia, Japan and Vietnam. This record growth reflects our competitiveness, successful airline marketing and tourism partnerships with DNSW and Tourism Australia.
“As a result of the most significant investment programme since privatisation, passengers are enjoying a vastly improved customer experience, with additional seating closer to gate, new terminal wayfinding, increased natural light and enhanced retail offerings. We’re delighted that this is being reflected in improved airline service ratings and customer service scores.”