Auckland International Airport has carried out a swathe of cost cutting as it reports an expected slump in after-tax profit.
“These are extraordinarily challenging times for all of us in the New Zealand tourism industry,” chief executive Adrian Littlewood said
The company had reduced the number of employees by 25% from 600 and expected to make further staffing cuts as well as other measures.
The Government Covid-19 wage subsidy had provided $4.3m to employees.
The airport expected its after-tax profit for the year ending June to be hit by between $50m to $90m – last year’s after tax profit was $274.7m on revenue of $743m.
AIA issued two earnings guidances in March, with the first one expecting underlying earnings of between $210m and $235m.
It was soon followed by a second notice to NZX saying it had suspended all guidance.
International passenger numbers now averaged 800 per day at Auckland Airport, less than 5% of what they were six months ago.
“Airlines have been deeply impacted and the number of carriers operating here has fallen from 29 to 11. Daily flight numbers have also reduced, falling by 80% to 100 per day made up of domestic, cargo and repatriation services.”
Today’s announcement said the airport had made deep cuts to discretionary expenditure, suspended external consulting, reduced external contractors, reduced remuneration of directors and executives to 80%, lowered most other employees’ hours and salaries to 80%, suspended bonuses and short-term incentives, and implemented a hiring and salary freeze.
Capital expenditure on projects with completion value of more than $2bn had been suspended including the release of 90 contractors, and it had raised $1.2bn of new equity.
Several “significant items” contributed to the expected profit fall.
They included capital expenditure write-offs of $42m-$52m, capex termination costs of $70m, redundancy costs of $4m-$5m, bad debts of $10m, rent abatements of $62m to 67m, impairment of lease receivables of $16.4m.
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