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The Dublin Airport Authority (DAA) is fully prepared to begin building Dublin Airport’s second passenger terminal (T2) and associated facilities, as soon as the company receives approval from the planning authorities, according to the Chairman of the DAA, Gary McGann.
He noted however, that the DAA would only be in a position to have T2 operational before the end of 2009, as the Government has mandated, if An Bord Pleanála announced its decision relating to T2 planning appeals within the next couple of weeks.
Mr McGann was speaking at the publication of the DAA’s results for 2006 in Dublin today (Monday, June 18). The company announced profits from normal trading activities of €69.5m for the year ending December 31, 2006, an increase of 39% compared with equivalent profits of €50m in the previous year.
Profits for the year after exceptional items amounted to €166m. The exceptional items, with a combined net value of €96.5m, comprised the after tax profits arising from the sale of the Great Southern Hotels Group (GSH) of €125m and of the company’s 3% shareholding in Hamburg (€3m) less the after tax cost of the restructuring plan at Shannon Airport (€31.5m).
“We have done everything possible to put ourselves in position to deliver the Transforming Dublin Airport programme and to satisfy Government policy requirements in this regard, as quickly as possible,” Mr McGann said.
“Just two years after the publication of the Government’s Aviation Action Plan, 70% of the DAA’s first-phase, €1.2bn investment programme at the airport is either under construction or at the planning stages. The first major element of the programme, Pier D, will open on schedule this autumn.
The new terminal has a two-year construction time-frame and subsequent five-month commissioning schedule, which by any standard is extremely tight. Consequently, we need to have planning clarity by the end of June in order to begin preliminary construction activity by mid-July and deliver an operational facility before the end of 2009,” Mr McGann said.
“The DAA fully appreciates An Bord Pleanála’s very heavy work load and the care it has taken in processing the T2 planning appeal to date. However, the company had expected an outcome to the appeals process within six to eight months of obtaining planning permission last October. We must hope, given An Bord Pleanála’s many commitments, it is in a position to prioritise its deliberations on T2 - given Dublin Airport’s strategic importance for millions of passengers and the overall economy.”
Mr Mc Gann said the DAA was currently engaged in consultation with the Commission for Aviation Regulation (the Commission) concerning the detailed proposals of the Commission’s recent draft Interim Determination on maximum airport charges at Dublin Airport.
“There is a requirement for funding clarity from the Commission in order to optimise the financing of the project. Arising from recent consultation however, the Board of the DAA now has greater confidence that the Commission will sanction an adequate increase in airport charges at Dublin Airport over the lifetime of the Transforming Dublin Airport programme to compensate the company appropriately for its investment.”
Combined passenger numbers at Dublin, Shannon and Cork Airports rose by 14% last year to 27.8m. This represented the highest percentage increase for almost 20 years, and from a much higher base. Passenger numbers at Dublin Airport climbed by 2.7m to 21.2m, the highest level of growth at any major airport worldwide. Shannon and Cork also achieved record passenger volumes, each rising by just over 10% to 3.6m and 3m respectively.
Supported by higher passenger throughput, all key measures of profitability continued to move in a positive direction during 2006 including Group EBITDA (earnings before interest, taxation, depreciation and amortisation), which rose by €34m to €145m.
The Chief Executive of the DAA, Declan Collier said the company had strengthened its financial position through a combination of prudent management of costs, the continued success of its commercial operations at home and abroad, the successful disposal of the loss-making GSH hotels group, and the optimisation, through sale, of the value in some of the company’s overseas airport assets. But he added that further growth in profitability from normal trading activities was vital to meet the scale of the financial challenge facing the company.
“The Group’s net debt levels fell sharply by the end of last year to €136m due to the proceeds of the GSH sale. This borrowing position will soon change radically. As the Transforming Dublin Airport programme is rolled out, the Group’s net debt is expected to rise to more than €1bn over the course of the next five years.
“In order for the DAA to fund this level of debt within objectively measured and prudent parameters of financial risk, Group EBITDA needs to increase significantly over the same time frame,” he added.
Aer Rianta International (ARI), the DAA’s subsidiary company, which manages airport investments and airport retailing activities overseas, enjoyed another successful year in 2006. The profit contribution from ARI’s combined interests, including exceptional profits from the disposal of its shares in Hamburg Airport, increased by 12% to €19.5m.
ARI and its equal joint venture partner, Macquarie Airports Group, recently announced provisional agreement to sell their combined 48% shareholding in Birmingham International Airport in the UK for stg£420m to a consortium comprising Canadian and Australian institutional investors. The agreement, which is subject to a number of complex contractual and pre-emption arrangements, is unlikely to be completed until towards the end of the year.
Regarding the Government’s other principal airports policy requirement, Mr Collier re-affirmed that the State Airport’s Act stipulated that the separation of Dublin, Shannon and Cork Airports required the completion of airport business plans that would assure the Government that each had a viable, commercial future as a separate entity.
He said the recent restructuring agreement at Shannon Airport, involving 185 voluntary redundancies and significant changes in working arrangements for remaining employees, represented a positive first step towards Shannon’s financial viability.
June 18, 2007
For Information:
Vincent Wall: (01)
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Paul O’
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