Acsa returns to profit for first time since 2020

International and domestic air passenger numbers are at last returning to pre-Covid levels, and that’s reflected in Airports Company South Africa’s (Acsa) 16% jump in revenue to R7 billion for the year to March 2024.

The volume of passengers and aircraft into and out of the nine airports managed by Acsa isn’t quite where it was in 2019, but it’s more than three times what it was in 2020 at the height of the Covid travel slump.

Earnings before interest, tax, depreciation, and amortisation (Ebitda) increased 51% to R2.9 billion (2023: R1.9 billion), helped by the 16% improvement in revenue, while cost increases were contained to 6%.

The Ebitda figure was also helped by a restatement of prior-year financial statements after it was discovered that certain assets were being depreciated faster than appropriate. There was also an overstatement of some capital assets in 2022 and 2023, while some capex invoices had been duplicated.

The after-tax profit amounted to R472 million, against a R466 million loss in 2023.

This is the first after-tax profit reported by the company since 2020.

The financial turnaround was helped by an 8% lift in aircraft movements, a 16% increase in departing passengers and airport tariff increases of 4.4%.

Non-aeronautical revenue performance benefitted from the improved trading conditions, increasing by 12% to R3.4 billion from R3.1 billion the prior year. The bulk of this income came from retail activities (R1.1 billion) and property rentals (R924 million).

While operational expense increases were contained to 6% for the latest reporting period, employee expenditure jumped 27% to R1.6 billion (2023: 1.2 billion) as Acsa started filling vacancies arising from a staff cost reduction programme introduced in 2020. 

Capex was deployed on airport maintenance, refurbishments, rehabilitation and efficiency-related projects to the tune of R568 million.

ALSO READ: ‘Excellent performance’ – Acsa handled over a million international passengers in December

Tax disputes

Acsa says it is engaged in several tax disputes with the South African Revenue Service (Sars), the largest of which relates to disallowed capital allowances for commercial buildings and airport assets in prior financial years.

Acsa’s financial statements have been restated to reflect the additional tax assessments by Sars, as well as the increase in penalties, current tax owing and finance expenses. 

The restatement of financials was further impacted by an obligation to accurately reflect the costs of rehabilitating land on which there are bulk aircraft fuel storage facilities at the OR Tambo, King Shaka, Cape Town, and Chief Dawid Stuurman international airports.

ALSO READ: Acsa’s R21.7bn investment plan approved for SA’s airports

R21.7bn infrastructure programme

Earlier this year, Acsa announced that it would embark on a R21.7 billion capex programme across its airport network, a substantial part of which will focus on air cargo.

The company intends to expand its air cargo traffic in Africa, starting with the construction of the Mid-Field Cargo Terminal at OR Tambo Airport in Johannesburg, which will accommodate 750 000 tonnes of cargo annually.

This article was republished from Moneyweb. Read the original here.