First it was the bushfire crisis, now the coronavirus is going to hurt Sydney Airport’s bottom line.
The airport operator has posted a full-year after-tax net profit of $215 million, down from $371 million, after the bushfire crisis and challenging conditions affected traffic.
Sydney Airport’s 2019 net profit attributable to shareholders was $403.9 million up from $372.5 million in 2018.
It saw 44.4 million passengers in 2019, up just 0.1 per cent, on international passenger growth of 1.1 per cent and a decline in domestic passengers of 0.5 per cent.
Chief executive Geoff Culbert said 2019 had delivered some of the toughest trading conditions they had seen since the financial crisis.
“Between the ongoing bushfire crisis and the emerging novel coronavirus, people, property and travel plans have been impacted,” he said.
However, he said the business was strong and resilient.
“The fact that revenue grew by more than three per cent and earnings before interest, tax and amortisation by 4.0 per cent when passenger traffic was flat speaks to the diversity and resilience of this business.”
Sydney Airports will need its resilience in 2020 as the coronavirus affects traffic and uncertainty remains about how long that will last.
The scale of the impact will depend on the longevity of travel restrictions and the speed of recovery, the company said on Thursday.
International traffic was down 0.7 per cent in January and domestic traffic down 0.6 per cent.
February traffic results indicate a SARS-like impact to international traffic and weakness in domestic traffic.
Moody’s investor services vice-president Nicholas Chapman said Sydney Airport’s shorter-term outlook was affected by a subdued economic backdrop and the coronavirus outbreak.
“Nonetheless, we consider those challenges to be manageable in view of Sydney Airport’s solid liquidity position, diversified revenue streams and headroom within – and track record of maintaining – its credit metrics,” he said.
Sydney Airports said that in 2019 is Aeronautical business added 2.4 per cent due to international passenger growth and capital investment in infrastructure.
Retail grew 5.0 per cent over the full year and property and car rental increased 5.5 per cent after 78 more Ibis Budget rooms were added and freight leases were renegotiated on improved terms.
Car parking and ground transport dropped 0.1 per cent due to a fall in domestic passengers but this was somewhat offset by more money from T3 valet parking.
The company has extended the Heinemann duty-free contract on renegotiated terms until the end of 2029.
It paid 39 cents per stapled security to shareholders in 2019, the final 19.5 cents was paid on Valentine’s Day.
The company will give guidance on distributions for 2020 when the impact of bushfires and the coronavirus outbreak becomes clearer.
The company’s shares were 15.5 cents lower, or 1.78 per cent, at $8.29 at 1325 AEDT on Thursday.