AIRPORTS COMPANY SOUTH AFRICA SOC LIMITED - Audited Financial Results For The Year Ended 31 March 2024 - Airports Company South Africa SOC Limited

Audited Financial Results For The Year Ended 31 March 2024 -  Airports Company South Africa SOC Limited

 Airports Company South Africa SOC Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/004149/30)
Issuer Code: BIACSA


AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2024


PERFORMANCE HEADLINES:

  •   ACSA reports positive performance metrics since 2020.
  •   Revenue up 16%, from R6 billion to R7 billion.
  •   Profit of R472 million, recovering from a loss of R466 million
      in 2022/23. Gearing decreases to 17% from 24%.

KEMPTON PARK, Aviation Park, 5 September 2024 - Noteholders are hereby
notified that Airports Company South Africa SOC Limited (ACSA) has
today reported its audited financial results for the year to 31 March
2024, which reflect a return to financial stability, post the Covid-
19 crisis.
Earnings before interest, tax, depreciation, and amortisation (EBITDA)
increased by 51% to R2.9 billion (2022/23: R1.9 billion). Revenue
increased by 16% to R7.0 billion from the R6.0 billion reported in
the previous financial year. Operating expenditure was prudently
contained with the return to normal operating levels, increasing by
6% to R2.5 billion (2022/23: R2.4 billion). The primary contributors
to the increase in operating expenditure were maintenance, security,
utilities and cleaning costs. Credit losses on trade receivables were
significantly lower, and the Group's investment property portfolio
benefited from fair value gains.
These factors positively contributed to the first after-tax profit of
R472 million since the 2020 financial year, compared to a loss of R466
million in 2022/23.
The transition from the Recover and Sustain Strategy to the Innovate,
Grow, and Sustain Strategy, as well as the revised Financial Plan,
provided a structured management approach and a means of resourcing
the business in a way that has enabled the Group to secure and
safeguard its long-term sustainability.
Aeronautical revenue improved by 21% to R3.6 billion (2022/23: R3.0
billion). The 8% increase aircraft movements, 16% increase in number
of departing passengers and 4.4% inflationary tariff increase
contributed to this performance.
Similarly, non-aeronautical revenue performance benefited from the
improved trading conditions, increasing by 12% to R3.4 billion
(2022/23: R3.1 billion). The bulk of this income was derived from
retail activities (R1.1 billion) and property rentals (R924 million.


                                                                       
Employee expenditure increased by 27% to R1.6 billion (2022/23: R1.2
billion). This is due to progress on filling vacancies created by the
Staff Cost Reduction Programme, introduced in 2020, and restoration
of some employee rewards and benefits, including the payment of an
ex-gratia bonus of R75 million. An incentive bonus of R117 million,
based on 4% of company EBITDA, has also been provided for.
Capital expenditure was limited to airport maintenance, refurbishments
and rehabilitation, and efficiency and technology-related projects. A
total of R568 million (2022/23: R422 million) was spent on those
projects.
Restatement of the annual financial statements
Noteholders are advised of the restatements to the 2022/23 and 2021/22
figures in the 2023/24 annual financial statements, as outlined in
note G.13 of the annual financial statements.
Property, plant and equipment and depreciation and intangible assets
1. A review of useful lives revealed that certain assets had incorrect
useful lives allocated to them and were therefore being depreciated
over a shorter period than appropriate. The correction resulted in
the reduction in depreciation for the financial year ended 31 March
2023, and previous financial periods.
2. Upon completion of capital projects, assets were transferred
prematurely from work in progress to the relevant category. As a
result, the depreciation and accumulated depreciation were overstated.
The 2023 and 2022 amounts have been restated to correct the error.
3. The Group is required to rehabilitate land on which there are bulk
aircraft fuel storage facilities at the O.R Tambo, King Shaka, Cape
Town, and Chief Dawid Stuurman International Airports.
Evidence    of the obligation was available in the prior years and
therefore   the carrying amount of the Group's land, provisions, finance
costs and   operating expenditure were understated in the 2023 and 2022
financial   year.
4. Some capital expenditure invoices had been erroneously duplicated.
Consequently, trade payables and property, plant and equipment were
overstated.
Intangible assets
Some intangible assets were not transferred from work-in-progress to
the relevant category upon completion. As a result, amortisation and
accumulated amortisation for the 2023 and 2022 financial years were
understated.
Provisions, Finance cost and Operating costs
As outlined in 4 under 'Property, plant and equipment and depreciation
and intangible assets' above.


                                                                         
Current tax payable

There are several tax disputes ongoing in the Company. The most
significant pertains to the disallowance of capital allowances in
respect of commercial buildings and airport assets in terms of
sections 13quin and 12F of the Income Tax Act No.58 of 1962
respectively, for the 2018, 2019 and 2020 tax years. In the previous
financial year, the company received a suspension of payment from
SARS, which was later settled in October 2023. Although the company
continues to object to the additional assessment raised by SARS, the
financial statements have been restated to reflect the expenditure in
the years in which the additional assessments were levied by SARS.
The restatement resulted in increases in penalties (Operating
expenses), Current tax and finance expense.
Interest-bearing borrowings
There was an error in the calculation of the inflation-linked bond,
AIRL01, which resulted in an understatement of borrowings and interest
expense. The correction has been made retrospectively.
Deferred tax liability.
The tax effects of the restatement of the interest-bearing borrowings
resulted in the restatement of the deferred tax liability.
The annual financial statements have been audited by the Group's
auditors, Auditor-General South Africa, who expressed an unqualified
opinion thereon, with an emphasis of matter drawing attention to the
restatements noted above. The annual financial statements, including
the audit opinion and key audit matters, available for inspection
through a secure electronic manner at the election of the person
requesting inspection and can be found on the Group's website at:

https://www.airports.co.za/business/investor-relations/financial-
information

Media enquiries:
Ernest Mulibana, Senior Manager Communications
E-mail: Ernest.Mulibana@airports.co.za
Mobile: 082 263 7372

05 September 2024
Debt Sponsor
The Standard Bank of South Africa Limited




                                                                        
Date: 05-09-2024 02:34:00
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