ACSA returns to profitability after Covid hit

Airports Company South Africa (ACSA) recently announced a return to profitability, showcasing an improvement in its financial results. The state-owned company reported a significant growth in aeronautical revenue by 21 per cent to R3.6 billion, while non-aeronautical revenue also saw a boost of 12 per cent due to improved trading conditions. Luzuko Mbotya, the Chief Financial Officer of ACSA, highlighted the key drivers behind this positive performance in a recent interview with CNBC Africa. Mbotya credited the sterling traffic experienced across ACSA's network of airports, especially at the four international airports they operate in South Africa, for fueling the company's growth. The increase in departing passenger traffic and aircraft movement activity played a crucial role in driving aeronautical revenue, which in turn impacted non-aeronautical revenue, including commercial and retail sectors. In addition to the robust traffic growth, Mbotya emphasized the impact of cost containment initiatives that significantly contributed to improving the bottom line for ACSA. The CFO also addressed the decline in other income, attributing it to a shift in focus towards internal operations rather than external consulting services, particularly emphasizing the development of the in-house training academy to enhance future revenue streams. Furthermore, Mbotya discussed ongoing disputes with the South African Revenue Service (SARS) regarding a disallowance of capital allowance related to commercial buildings and airport assets. Despite challenges, ACSA remains engaged in discussions with SARS and is confident in reaching a resolution that aligns with tax legislation principles. When reflecting on post-pandemic recovery trends and regional travel patterns, Mbotya highlighted the positive performance in international traffic, particularly at Cape Town airport, fueled by increased tourist travel. Domestic and regional travel also saw substantial growth, with domestic travel emerging as a cornerstone of ACSA's financial success in the current year. Looking ahead, ACSA has earmarked R21.7 billion for capital expenditure over the next five years, with a significant focus on airport refurbishments, efficiency and technology enhancements to elevate customer experience, capacity expansion, and compliance requirements. The company's CAPEX allocation aligns with its strategic vision to enhance infrastructure quality and operational efficiency. In conclusion, ACSA's return to profitability and strategic investment plans underscore its commitment to sustainable growth and continued success in the aviation industry, positioning the company for a resilient future amidst evolving market dynamics.