First profit in 8 years for airport

CARDIFF Airport has delivered its first profit in eight years as it continues to grow passenger numbers and revenues.

Based on earnings before interest, tax, depreciation and amortisation (Ebitda) – which is seen as the key measure of operating performance and cashflow – the airport posted a small, but nevertheless important financial milestone, with a profit of £7,000 for the year to the end of March 2018.

This compared to Ebitda losses of more than £800,000 a year earlier.

Although on the pre-tax profit measure, following a year where its capital expenditure rose in improving infrastructure such as its terminal, it remains £6.6m in the red.

During the year revenues were up from £16.6m to £17.9m.

Revenues at the airport, which is wholly-owned by the Welsh Government but is operated at arm’s length through a commercial company, consisted of £9.6m in traffic income, £7.1m in commercial income and £1.1m in tenant income

It also has a £38m lending facility with the Welsh Government. At year end some £30m had been drawn down from the facility which has a 20-year repayment term. The interest is charged at commercial rates. As the airport is owned by the Welsh Government borrowing from financial institutions could impact negatively on the Welsh Government’s block grant.

The Welsh Government acquired the Rhoose-based airport from Spanish group Abertis in 2013 for £52m.

The positive passenger and revenue impact of the new route from Qatar Airways from Cardiff to Doha, launched in May – in the first scheduled service between Wales and the Middle East – will be felt in the current financial year.

During the last financial year total passengers grew year-on-year by 9% to reach 1.48 million. It is on track for double digit growth in the current financial year.

Based on modest organic growth the airport is on track to reach three million passengers by 2030, at which stage it will need a new and larger terminal at an estimated cost of £100m.

However, its chairman Roger Lewis said the aim, fuelled by securing new airlines and routes, is to achieve that target potentially as early as 2025.

Required investment in any new terminal could be the trigger for the Welsh Government to sell an equity stake in the business.

On the latest audited financial results Mr Lewis said: “As a board our focus was to significantly improve our business performance whilst simultaneously delivering the service expectations of our shareholder, stakeholders and customers.

“Subsequently we have strengthened the financial position of the company and we have enhanced the airport’s reputation and standing.

“We have continued our progress to financial sustainability and I am delighted to report that the airport has achieved a positive Ebitda performance for the first time in some eight years, improving our year on year result by £897,000.

“So, it truly has been a transformational and a pivotal year [financial] for Cardiff Airport.

“We have achieved significant continued growth in passenger numbers and we have strengthened our financial performance.”