Annual Results: QAC implements stabilisation plan during COVID year
18 Aug 2021
- Total revenue down 40% to $27.8 million
- Profit after Tax down 91% to $1.6 million
- $4.88 million support programme for airport tenants and operators at both Queenstown and Wānaka Airports implemented (valued at $6.75 million to date)
- No annual dividend to shareholders declared due to the continuing impact of COVID-19 on financial performance
Today, Queenstown Airport Corporation (QAC) reported its annual results for the year ending 30 June 2021, reflecting the impact of COVID-19 on the business and the region.
QAC Board Chair, Adrienne Young-Cooper said: “Our priorities over the reporting period have been to stabilise the business in the complex and uncertain operating environment created by COVID-19 as well as to safeguard the company’s core capability to operate vital airport infrastructure in the Southern Lakes region,”
“While we celebrated the return of trans-Tasman travel in April after 387 days without scheduled international services at Queenstown Airport, the vulnerability of the ‘bubble’ since and the emergence of the highly contagious COVID-19 Delta variant further reinforces the highly uncertain environment we continue to operate in. Prudent and very cautious operational and capital planning, and the ability to make quick decisions continue to be required.”
In FY21 there was a sharp decline in passenger movements (arrivals and departures) at Queenstown Airport compared to FY20, which led to aeronautical and commercial revenue decreasing by 41% and 40%, respectively. Overall, QAC’s revenue was down 40% to $27.8 million from $46.7 million in FY20.
Reported Net Profit After Tax was down 91% to $1.6 million from $18.0 million last year. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) decreased by 45% from $31.3 million to $17.1 million.
Activity at Queenstown Airport (ZQN) for the twelve months to 30 June 2021 was significantly lower than the previous year:
- Total passenger movements (arrivals and departures) were down 29% compared to FY20 and 42% compared to FY19
- International passenger movements were down 96%
- Domestic passenger movements were up 2%
- General aviation fixed-wing landings were down 36%
- Helicopter landings were up 5%
- Private jet landings were down 24%
Mrs Young-Cooper said: “COVID-19 has had a significant impact on the aviation and tourism industries in the Queenstown Lakes District, and around the world. Businesses and airlines operating at both Queenstown and Wānaka airports have been severely impacted,”
“Providing support to the operators at the airports has been an integral part of QAC’s response. We implemented a broad support programme, including rent relief packages, in early 2020 which was valued at $4.88 million for the reporting period and $6.75 million to date.”
QAC also undertook an organisational restructure in response to the impact of COVID-19, which was completed during the reporting period. Mrs Young-Cooper said: “This was a difficult time for our people, and the board of directors joins me in acknowledging those who left the business as a result of the restructure and thanking them for their contribution to QAC.”
QAC halted most of its capital expenditure programme and significantly reduced its operating expenditure as a key component of the company’s stabilisation plan. Total operating expenditure decreased by 30% to $10.7 million from $15.3 million last year.
The key capital project during the year was the Terminal Upgrade Programme (TUP) at Queenstown Airport. Detailed design was completed, and construction began in the terminal building in April, involving a range of improvements to the departures processing area which will ultimately enhance the passenger screening and airport security processes. It will also improve the resilience and seismic performance of our existing terminal infrastructure.
During the reporting period, Chief Executive Colin Keel resigned after five years’ service, ending his tenure on 30 June 2021.
Mrs Young-Cooper said: “Colin brought with him a wealth of business and aviation experience and played a pivotal role in stabilising the business over the last 18 months as QAC navigated its way through the implications of COVID-19. On behalf of the board, I thank him for his service and his significant contribution to the company and wish him well,”
“The Board has appointed Glen Sowry as QAC’s next CEO. Glen will commence in the role in September 2021. The board of directors looks forward to welcoming and working with Glen.”
During the year QAC continued to progress initiatives to enhance social, cultural, environmental and economic wellbeing in the district. QAC continued its support of the Wakatipu Reforestation Trust, Wakatipu High School Foundation and Coastguard, along with several other sponsorships and community partnerships.
QAC also achieved Toitū carbonreduce certification. Energy, waste, and transport have been identified as priority areas because of their contribution to our carbon footprint. The annual audit and certification process enables us to benchmark, set science-based targets and measure our progress in reducing the environmental impact of our business operations to achieve carbon neutrality by 2050, or earlier. Audits for FY19, FY20 and FY21 have now been completed. QAC will report its targets and progress as part of its annual reporting from FY22.
On 21 April the High Court handed down its decision on the judicial review proceedings initiated by the Wānaka Stakeholders Group in late 2019, to which QAC was the second respondent.
Managing Director, Simon Flood said: “As a result of the decision, the 100-year lease of Wānaka Airport granted by QLDC to QAC on 1 April 2018 was set aside from the date of the judgement. We have shifted to operating Wānaka Airport under a management services arrangement with responsibility for day-to-day operations. We are continuing to work with QLDC and the Wānaka Airport tenants on a smooth transition from the lease agreement to the management services agreement.”
Mr Flood said: “While the past year brought its challenges, it brought to the fore the strength of our airport community and the Queenstown Lakes district. We have seen many people go the extra mile to make a difference and we would like to acknowledge the support and efforts of the QAC team, our shareholders, the Queenstown and Wānaka airport communities, and the residents and businesses of the district,”
“There will continue to be challenges and disruptions in the year ahead due to the ongoing impacts of COVID-19. We will work in close collaboration with our shareholders, stakeholders, and the community to forge a path forward to recovery of the district balancing social, environmental, cultural, and economic wellbeing.”
QAC’s annual report, 30 June 2021 is available to view here.
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