Airports Company SA reports steep fall in profit
The big reduction in profit ‘is very disappointing as much of our increased costs had a direct impact on our bottom line’, acting CEO Bongiwe Mbomvu says
Airports Company SA (Acsa) has reported a steep fall in profits for the year, driven by significant revenue and cost pressures in a weak economy
The company, which manages SA’s nine principal airports, contended with “significant challenges in the period”, which constrained revenue growth and also raised costs, acting CEO Bongiwe Mbomvu said in a statement.
These included the weak SA economy, which affected passenger numbers and the viability of some local airlines, which took a toll on Acsa revenues from commercial activities.
Although the group, which is the Africa’s largest airport operator, managed to grow revenues 5.6%, earnings before interest taxation depreciation and amortisation (Ebitda) shrank 4.6% while net profit for the year fell 58.9%.
“Such a major reduction in profit is very disappointing as much of our increased costs had a direct impact on our bottom line,” Mbomvu said. But she said that considering the difficulties, the fact that the company recorded a profit of R227m, as well as reduced debt by R2.3bn, was testament to its resilience.
The company received an unqualified audit, she noted, and was proud of its record as a well-run state-owned entity that has never needed government support or guarantees.
The company saw significant cost pressures, principally relating to security services, which rose 50%, thanks to regulatory amendments and heightened, security measures implemented during the year.
Employee costs, one of its largest cost drivers, rose 17% to R1.64bn.