Buyout target Sydney Airport's H1 loss nearly doubles on low travel

[SYDNEY] Sydney Airport Holdings on Friday reported its first-half loss nearly doubled in a tough period for travel demand, days after rejecting an improved A$22.8 billion (S$22.18 billion) buyout offer from a consortium of infrastructure investors.

The A$97.4 million net loss at Australia's biggest airport operator for the six months ended June 30 compares with the A$53.6 million loss reported last year.

Earnings before interest, tax, depreciation and amortisation, a measure favoured by analysts covering the stock, fell by 30 per cent to A$210.8 million in the first half, below the Visible Alpha consensus of A$228.6 million cited by broker Jefferies.

The airport, which has said it is open to considering a higher buyout offer from the Sydney Aviation Alliance (SAA) consortium comprised of IFM Investors, QSuper, Global Infrastructure Partners and AustralianSuper, did not pay an interim distribution.

Citi analysts expect distributions will be suspended until June 2022 due to a slow recovery from the pandemic, which has closed Australia's international border and led to domestic travel restrictions.

Sydney Airport's international traffic was down 91 per cent in the first half from last year's levels, which had been less affected by the pandemic in the first quarter.

Domestic traffic fell by 3.1 per cent relative to 2020 but was down 57.5 per cent on 2019 levels.

Sydney Airport said on Monday that its board was open to engaging with the Sydney Aviation Alliance if the consortium lifts its indicative price beyond the rejected A$8.45 "to appropriately recognise long-term value for Sydney Airport securityholders."

REUTERS