Sydney Airport Share Prices Declined Despite Solid Passenger Growth

  • Sep 20, 2018 AEST
  • Team Kalkine
Sydney Airport Share Prices Declined Despite Solid Passenger Growth

On 20 September 2018, Sydney Airport (ASX: SYD) announced that its passenger growth has remained solid. In the month of August 2018, the total passenger growth has been increased by 3.8% compared to the prior corresponding period. The overall international traffic grew by 4.7% in the month of August 2018 compared to the previous corresponding period. The reason behind the international growth is mainly the delivery of additional seat capacity. There was also a 2.9% load factor improvement due to which the domestic passengers also increased by 3.3% in the month of August compared to the prior corresponding period (PCP).

In the first half of FY2018, the total revenue earned by the Sydney Airport was $770.8m which was $714.2m in the corresponding previous year. The total operating expenses grew from $186.6m in 1H2017 to $147.4m in 1H2018. Earnings before interest, tax, depreciation and amortization (EBITDA) increased from $577 Mn in 1H2017 to $623.4 Mn in 1H2018. The distribution declared per stapled security increased from 16.5 cents in 1H2017 to 18.5 cents to 1H 2018. Sydney Airport has continued demonstrating the proactive capital management approach with enhancing of liquidity position with $1.4 billion in undrawn bank debt facilities. With the issuance of the second Euro bond, the funding sources have also been diversified. The execution risk has been minimized significantly due to optimal timing with early investor engagement. The currency exposure is 100% hedged over the life of the bond. Sydney Airport is also planning to open 14 new T2 stores in the last quarter of FY2018. Sydney Airport is also investigating commercial leasing opportunities across all airport land. The Ground transport strategy of Sydney Airport has recognized the potential of changes in the traffic volumes and pattern which will improve the road network performance around Sydney Airport. Sydney Airport is focusing on maximizing their core business and grow new business opportunities. With the positive macro environment and strong business performance, the Sydney Airport is expecting a positive outlook in the future.

Despite positive traffic performance report, the share price has fallen 1.404 per cent before market close on September 20, 2018 and recorded market capitalization of $16.06 billion.

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