AIRPORTS COMPANY SOUTH AFRICA BUDGET M.W. Hlahla B.T. Mparutsa B. Maseko

Transcription

1 AIRPORTS COMPANY SOUTH AFRICA BUDGET 2008 M.W. Hlahla B.T. Mparutsa B. Maseko

2 Agenda Highlights, Key Value Drivers Economic Assumptions Regulatory Environment Capital Expenditure Capital Structure Traffic Assumptions and Key Objectives for 2008 Consolidated Income Statement Details per category and airport Commercial Services Human Resources Expenditure Balance Sheet and Cash Flow Statement

3 Highlights 2008 Budget Revenue EBITDA Headline Earnings EBITDA Margin (%) Nominal Return on CE (%) 8.01% Return on Equity (%) Capex 14.23%

4 Strategic deliverables Improvement in the end to end user experience in operations; Focus on the customer/passenger; Safety and Security Permission ; Capital Structure and borrowings; La Mercy; Cargo; Commercial (Property / Advertising / Parking).

5 Strategic deliverables Achieve strategic deliverables through internal business processes including: Human Resources; Brand Management; Information Technology; Stakeholder Management; Appropriate Operating Structures

6 Strategic Deliverables Timeous infrastructure provision; Provision of public transport e.g. Gautrain; Provision of parking facilities; Integrated technology based solutions, Airport Management Centre; Service Level Agreements with partners and service providers; Ramp Handling Licences.

7 Key Value Drivers Regulated Tariffs - budgeted tariff increase of 8.5%; Traffic Growth is still maintained for PAX to 9.47% ( 07: 9.03%) and ATM s to 5.93% ( 07: 10%); Commercial Revenue increases by 16.01% ( 07: 17.5%) lead by property income; Operating Expenditure maintain cost control whilst improving operating environment and customer satisfaction; Appropriate Capital Structure increase level of gearing to 50% with increased capex plans; Capex meet all capex required for World Cup 2010 as well as the new permission.

8 Economic assumptions

9 Economic Assumptions Actual Actual Estimate Forecast GDP Growth (%) Inflation (%) CPIX Average ZAR / USD Average ZAR/ Euro R153 Bond Yield (%) R157 Bond Yield (%) Prime Overdraft Rate (%) Personnel Cost Increases (%)

10 Current Economic Environment Domestic economy continues to be robust with retail sectors performing particularly well; Business confidence remains high; Inflation (CPIX) remains within the 3 6% target range; Construction Inflation remains very high - in excess of 15% Prime rate increased by 200 bps from 10.5% to 12.5% - no increase in Feb 07 and April 07; Growth continues to exceed forecasts; Further growth initiatives will be implemented targeted at achieving a 6% growth rate; Public sector infrastructure investment programmes.

11 Regulatory Environment

12 Economic Regulation Permission Application submitted on 30 September 2006; Regulating Committee (RC) unable to meet the timeline with regard to finalising the tariffs; New Regulatory Asset Base (RAB) principles introduced the RC; Regulatory financial model being updated with the new RAB principles; Revised model to me submitted to the RC in mid-march 07; Finalisation expected by the end of May 07.

13 Capital Expenditure

14 ACSA MAJOR DEVELOPMENTS ORTIA Developments International Pier & Echo Apron International Departures Upgrade Central Terminal Building New MSP Gautrain ABSA ITB

15 ACSA MAJOR DEVELOPMENTS ORTIA International pier

16 ACSA MAJOR DEVELOPMENTS CIA developments New Domestic Terminal Wing New Central Terminal Building International Terminal Wing upgrade A380 aircraft stands MSP (under construction) New Upper Road 2 nd MSP

17 ACSA MAJOR DEVELOPMENTS CIA New terminal airside view

18 ACSA MAJOR DEVELOPMENTS CIA New terminal landside access

19 ACSA MAJOR DEVELOPMENTS CIA - MSP

20 Capital Expenditure 4,800 4,400 4,000 3,600 3,200 2,800 2,400 2,000 1,600 1, Capex (R'm) Permission (R'm)

21 Capital Expenditure Airport Services Commercial Total ORTIA 1,478,222, ,116,157 1,915,338,304 CTIA 549,564, ,183, ,747,348 DIA 33,507,641 31,000,000 64,507,641 La Mercy 1,586,958,186-1,586,958,186 Corporate 144,495, ,495,900 PE 46,895,149 4,950,000 51,845,149 EL 85,733,808 5,300,000 91,033,808 BL 40,873,580 1,900,000 42,773,580 GG, KM, UP, PIA 50,261,409 8,000,000 58,261,409 TOTAL 4,016,512, ,449,257 4,668,961,324

22 Capital Structure

23 Capital Structure Key Initiatives R12 bn DMTN programme registered on the Bond Exchange of South Africa in Feb. 07; Achieved an independent AA rating by Fitch; Initial R 2 bn bond issued on 15 March 07; Gearing will increase during this high capex period; Continue to seek longer term funding; Match underlying tariff with debt pricing profile; Manage dividend policy / payout ratio; Maintain bank lines; Establish a Treasury function.

24 Traffic Assumptions

25 Traffic Assumptions Based on TRL, Airlines Associations and ACSA forecasts; Full recognition of new entrants into market e.g. Mango, Flyglobespan, Thai, Delta, Bellevue and Ghana Airways; Domestic demand under pressure with increase in interest rates; Low cost carriers Mango operated from December 2006; Intense continuing pressure to cut costs for the aviation sector as a whole; Forecasts adjusted for known entrants, schedule changes and cancellations.

26 Passenger Increase Summary PAX % growth Actual Forecast Budget Domestic International Regional Unscheduled (4) TOTAL

27 ATM Increase Summary ATM % growth Actual Forecast Budget Domestic International Regional Unscheduled TOTAL

28 Consolidated Income Statement

29 Consolidated Income Statement 2008 BUDGET Aeronautical Revenue Commercial Revenue Other Revenue Total Revenue Personnel costs Repairs and Maintenance Utilities Security Marketing Other Costs Operating Expenditure EBITDA

30 Consolidated Income Statement (Cont.) 2008 BUDGET EBITDA Depreciation Net Operating Income Finance charges ( ) Net Income before Taxation Taxation ( ) Net Income after Taxation

31 Details per category and airport

32 Aeronautical Revenue MAJOR CATEGORIES 2008 Budget % Landing Fees % Passenger Service Charge % Aircraft Parking % TOTAL %

33 Aeronautical Revenue SEGMENTAL ANALYSIS BY AIRPORT 2008 Budget % ORTIA % CIA % Domestic Airports %

34 Passenger service charge MAJOR CATEGORIES 2008 Budget % International % Domestic % Regional % Unscheduled % TOTAL %

35 Landing fees MAJOR CATEGORIES 2008 Budget % International % Domestic % Regional % Unscheduled % TOTAL %

36 Commercial Services

37 Commercial Revenue 2008 Budget % Advertising % Retail % Car Parking % Car Rental % Property % Lease Smoothing (21 541) (1.8%) TOTAL %

38 Commercial Revenue SEGMENTAL ANALYSIS BY AIRPORT 2008 Budget % ORTIA % CIA % Domestic Airports %

39 Human Resources

40 Human Resources Main Assumptions: FTE increase related to ACSA s strategic approach in addressing service levels Focus on the passenger and ensure efficiency in operations for the end-to-end experience; Increased investment in safety and security; Salary increases in line with inflation at 7 %;

41 Analysis: Headcount vs. Volume Growth % increase ATMS PAX Headcount (2.25) 7.42 (0.61) (0.11) Cumulative

42 Human Resources 2007 Forecast 2008 Budget % Variance Full Time Employees PAX / Employee Personnel cost / Employee Staff cost / Operating cost 196K 206K % % 6.0

43 Human Resources Security 134 8,876,920 Safety 9 1,639,533 Project Managers 2 682,864 Engineers & Technicians 26 6,785,123 Legal 2 665,489 Information Technology 3 1,144,041 Internal Auditor 1 315,489 Human Resources 5 1,040,276 Fire & Rescue 27 2,751,959 Client/Duty/Passenger Managers 70 10,855,908 Commercial 12 2,512,958 Aviation Services 2 664,064 Secretarial, Finance and Admin, MD s Office 7 1,473,732 Total New Staff Members ,408,357

44 Expenditure

45 Expenditure Repairs & Maintenance increase by 7.8% as a result of an increase in preventative and scheduled maintenance and increased infrastructure; Security Costs increase by 15.5% due to additional staff and the new security contracts; Marketing increase with 69% due to required CSI spent of 1% on turnover, as well as communication drive to stakeholders; Rates and Taxes do not increase if the R&T refund in CTIA is excluded; Administration increases by 4.5%, but decreases by 7% if the additional R4.7m for service standards monitoring are excluded.

46 Balance Sheet and Cash Flow Statement

47 Consolidated Balance Sheet 2007 FORECAST 2008 BUDGET Share Capital Long Term Borrowings Retained Income Deferred tax Creditors & provisions Loans and funding Total Liabilities Assets Net Book Value Investments Receivables Cash and Stock (1 628) (4 774) Total Assets

48 Cash Flow Statement 2008 BUDGET Net Profit before tax & interest Depreciation Investment Income Profit on sale of assets (390) Net Provisions realised (3 822) Decrease in receivables & stock Increase in accounts payable Cash generated by operations Interest paid ( ) Taxation paid ( ) Dividends paid ( ) Net cash inflow from operating activities

49 Cash Flow Statement (Cont.) 2008 BUDGET Net cash (out)/inflow from operating activities Proceeds on disposal of assets 390 Additions to Fixed Assets ( ) Increase / Decrease in RFB liabilities & Deferred Tax Increase in short term loans /borrowings Movement in cash for year (3 259) Cash at beginning of year (3 088) Cash at end of year (6 347)

50 End