ACSA full-year revenue surges 55%
State-owned airport management company Airports Company South Africa says it narrowed it's losses in the year to R143 million, from the R1 billion loss in 2021/22. Joining CNBC Africa for more is Lindani Mukhudwani, CFO, ACSA.
Tue, 12 Sep 2023 17:19:31 GMT
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AI Generated Summary
- ACSA narrows net losses to R143 million from R1 billion, driven by a significant increase in total revenue to R6 billion.
- Effective cost management and tariff increases contribute to a notable EBITDA of R2 billion for the year.
- Projections indicate a steady increase in passenger numbers and a strategic focus on enhancing non-aeronautical revenue streams to reduce reliance on aeronautical charges.
Airports Company South Africa (ACSA) recently announced a remarkable improvement in its financial performance for the year, with a notable reduction in net losses. The company's Chief Financial Officer, Lindani Mukhudwani, highlighted that ACSA narrowed its losses to R143 million from a staggering R1 billion loss in the previous year. This positive outcome was primarily driven by a significant increase in total revenue, which reached R6 billion in the current financial year. The company saw a surge in both aeronautical and non-aeronautical revenue streams, with aeronautical revenue contributing R2.9 billion and non-aeronautical revenue contributing R3.1 billion to the total revenue. This represents a substantial increase from the R3.9 billion total revenue recorded in the previous year.
Operating expenses were effectively managed at R3.5 billion, leading to a noteworthy EBITDA of R2 billion for the year, a substantial improvement from R342 million in the previous year. Despite these positive developments, ACSA faced challenges such as a fair value loss of about R209 million in investment property valuations and significant credit losses from trade receivables, totaling around R542 million.
ACSA's ability to contain costs and implement tariff increases on aeronautical charges played a crucial role in its financial performance. The company implemented a 3.3% tariff increase in the previous financial year and a 3.1% increase in the year under review. Looking ahead to the 2024 financial year, ACSA has been granted permission to implement a 4.4% CPI-linked increase on passenger service charges, indicating a strategic approach to revenue generation.
The positive trend in passenger numbers on the aeronautical side is a key focus for ACSA, with projections indicating a steady increase from 15.8 million passengers to an estimated 16.5 million in the next financial year. The company aims to maintain a 50-50 revenue split between aeronautical and non-aeronautical revenue streams while striving to enhance its non-aeronautical business to reduce reliance on aeronautical charges.
Despite operating challenges posed by power cuts in South Africa, ACSA has implemented contingency measures such as standby generators and backup solar energy to ensure uninterrupted operations during blackouts. The company acknowledges that managing these contingencies comes at a significant cost, reflecting its commitment to maintaining operational integrity.
In conclusion, ACSA's financial results demonstrate a strong performance, marked by revenue growth, cost containment, and strategic revenue enhancement initiatives. The company's focus on diversifying revenue streams and ensuring operational resilience positions it for continued success in the aviation industry.
