Christchurch International Airport has record year

"CIAL achieved a normalised net profit of $26.8 million for the year to 30 June 2010 - an excellent result - and recorded the highest ever passenger through-put of any year, exceeding six million passengers for the first time," said chairman David Mackenzie.

"The $26.8 million profit is a significant increase over the 2008 / 09 financial result, and the passenger numbers were 92,000 higher than the year before. The company also surpassed expectations in a number of other operational areas."

However, the company had to make a deferred tax adjustment to meet financial reporting obligations, following the Government's decision in the 2010 Budget to no longer allow claims for depreciation on buildings for tax purposes.

"The deferred tax liability is a technical adjustment which changes CIAL's operating profit after tax of $26.8 million profit to an after-tax deficit of $260, 000," said Mr Mackenzie.

"While we appreciate this abnormal adjustment is about complying with international accounting standards, the adjustment effectively wiped out this year's reported profit, for a tax liability that does not exist in a real sense. The tax impost we are required to report against our revenue is not an amount of tax that CIAL has to actually pay. It is a shame that this technical reporting process appears, on the face of it, to undermine what was an exceptional year for the company. It is important to bear in mind that the final result (following the technical adjustment) does not provide an accurate picture of CIAL's true financial performance."

CIAL will pay a total dividend of $15.2 million on this year's results.

CIAL Chief Executive Jim Boult stated that in addition to achieving record revenue levels, significant cost savings had been achieved, but not at the expense of jobs.

"In a year where national unemployment levels have increased significantly, it is pleasing that CIAL's in-house expertise increased moderately over the past 12 months."

Mr Boult reiterated that "the company is performing better than ever before with improvements in virtually every area of the company's business. Achieving the greatest passenger through-put in any year, exceeding six million passengers for the first time, is a very good result in a global recession. It is particularly pleasing to see the long-term investment we have made with our airline partners and the tourism sector beginning to pay off. "

Jim Boult said that in particular, the company has concentrated on a diversification strategy and property developments.

"Diversification is imperative to enable the company to develop stable revenue flows in the face of a volatile aviation industry. Our progress in this area is important as it means we are less reliant on aeronautical income which is easily affected by global economic and varying airline industry conditions. It also means the airport company can continue to offer competitive solutions to airlines so that we can build new routes and increase passenger numbers even more in the future."

A critical part of CIAL's growth strategy is the development of new long-haul routes into the South Island. In its marketing, CIAL positions Christchurch as the tourism gateway to the New Zealand. It is estimated that in the last 12 months foreign visitors to the South Island spent in excess of $4 billion.

"Our aeronautical business development team works continuously with airline partners and new airlines to develop new long-haul routes. Our focus at the moment is on new services out of the Americas and Asia," Mr Boult said.

"The company expects to announce new routes in the next 12 months. The long-awaited introduction of new generation aircraft such as the Boeing 787 and the Airbus A350 will be important factors in those markets."

Mr Boult also noted the importance of maintaining and growing the trans-Tasman market and said the company's joint marketing ventures were widely acknowledged in the industry.

"Our success in attracting new airlines to Christchurch International Airport was recognised nationally and internationally this year. The Airport won four marketing awards, including New Zealand Airport of the Year, as well as three prestigious international Routes Marketing awards which are voted on by airlines. These awards were for the Oceania region, the Asia-Pacific region and a Global award."

Mr Mackenzie said the Board was pleased with the company's performance and expected its sustainable long-term growth to continue.

"Of particular significance is the solid progress on the construction of the new integrated terminal and the ongoing improvements in environmental standards and activities. We have a very strong platform to continue to grow our business," he said.

The earthquake that struck Canterbury in the early hours of Saturday 4th September does not appear to have had a significant effect on the airport company. As a precaution, the airport was closed for seven hours following the quake, while engineers surveyed runways, terminal buildings and the car park building. Once these were certified safe and operable, the airport reopened and has remained open ever since, except for the domestic terminal closing briefly for three hours early on the Tuesday morning following the quake.

Mr Mackenzie expressed his concern at the effects on people and the community, but did not expect the earthquake to affect the airport's medium-term outlook. "I have been impressed with the response of the staff and the airport company in returning the airport to operational status so quickly in difficult circumstances. "

SUMMARY OF RESULTS

6,000,414 passenger movements

79,016 aircraft movement

$93.6 million operating revenue

$60.8 million EBITDA

$26.8 million adjusted operating surplus after tax

$10.5 million dividends paid

$82 million investment in airfields, terminal, car parking and property projects

$9.90 per share Net Asset backing