Sydney Airport has been in the news quite a bit since the beginning of July when the company was the target of an acquisition bid. Sydney Airport announced that they have received an unsolicited, indicative, conditional and non-binding proposal from a consortium of infrastructure investors to acquire, by way of scheme of arrangement and trust scheme, 100% of the stapled securities in Sydney Airport at an indicative price of $8.25 cash per stapled security. The acquisition bid comes from IFM Group, QSuper, and Global Infrastructure Management, LLC.
This sent the otherwise laggard SYD share price skyrocketing and since then, the Board of SYD has rejected the bid and the stock continues to trade sideways. Today, Sydney Airport announced their FY21 Half Year results and given the low levels of Traffic due to lockdowns, there have been impacts, however, none that surprised the market. Among the highlights for the half year period:
- Sydney Airport welcomed 6 million passengers for the half year, a decline of 36.4% on the prior corresponding period (pcp)
- Sydney Airport delivered revenue of $341.6 million, a decrease of 33.2% compared to the pcp
- International passengers declined by 91.0% on the pcp, domestic passengers declined by 3.1% on the pcp
- Loss after income tax expense of $97.4 million for the half year
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $210.8 million, down 29.8% on the pcp
- Net operating receipts (NOR) of $1.8 million, down 98.0% on the pcp
- Tight cost control resulted in operating expenses of $74.2 million, down 7.8% on pcp
- First half disciplined capital investment of $65.2 million focused on critical projects
- Strong balance sheet with $2.9 billion of liquidity as at 30 June 2021
- 12 new global luxury brands to reposition the international luxury retail precinct
- Over 100 hectares of land under active planning for development pipeline
Sydney Airport Chief Executive Officer, Geoff Culbert said, “It was a challenging six months, but we were encouraged to see passenger traffic rebound strongly every time borders were open. From January to April, we recovered to 65% of our pre-COVID domestic passengers and in just over two months between late April and June, trans-Tasman traffic recovered to more than 40% of pre-COVID levels. We’re optimistic that this trend will repeat itself as the vaccine program gains momentum and we see a sustained easing of restrictions.”
Given the uncertainty that remains with respect to the recovery in 2021, Sydney Airport did not provide guidance. SYD shares dipped marginally in trading today – by 0.26% and closed at $7.70 a share.
Get stock tips with our Market Experts. We help self-directed investors and self-managed super funds (SMSF) make smarter investment decisions and get better returns. Fill in your details and download your ‘Top 3 Income Stocks to buy in 2021’ Report instantly for free! Click here to download now!