Rising passenger numbers and a return on retail redevelopment are expected to be the feature of Auckland International Airport's (AIA) report on the half year to December, due out tomorrow.
AIA is expected to book a 7.3% increased after-tax profit to $57.9 million, both Craigs Investment partners broker Peter McIntyre and Forsyth Barr broker Peter Young have forecast.
''Auckland airport's key value driver, its international passenger numbers, is tracking in line with our full-year forecast of a 4.5% increase,'' Mr McIntyre said.
He said with the completion of retail developments in December, which had been disruptive during the year, and two duty-free outlets which were now operational and ''performing strongly'', the airport's retail sector should be a key feature of tomorrow's result.
''Arguably AIA should be able to comfortably hit their aspirational full-year 2011 target for retail revenue of $105 million, assuming passenger growth continues to track around current levels,'' Mr McIntyre said.
Mr Young said AIA was a ''sound investment story'', given its control of New Zealand's major gateway and the country's positive longer-term tourism outlook.
He said modest revenue gains were expected across most of the key segments, given the number of international passengers was up 4.5% and
domestic 2.6% and increase in aircraft tonnage landed 1%.
''While most of the return to earnings growth in full-year 2011 will be driven in the second half with the fully operational retail precinct, the revenue gains and cost containment in the first half will lead to growth in after-tax profit,'' Mr Young said.
However, he cautioned that despite successful business development initiatives to increase airline capacity, the tough operating environment with weak traditional markets such as the US and UK and a slowing in the Australian growth rate could keep near-term outlook comments ''relatively subdued''.
Mr McIntyre said the international passenger numbers were being driven by a recovery in the wider Asian market, including China, India, Japan and Korea.
''United Kingdom arrivals remain soft, reflecting macro conditions and weakness in the pound sterling; and the United States market appears to have stabilised,'' Mr McIntyre said.
The ''key'' Australian market, which accounts for about 45% of passengers, is at higher levels because of benefits from the strength of the Australian dollar and new capacity in the sector.
While domestic growth had ''flattened out'' because of the withdrawal of Pacific Blue late last year, Mr McIntyre forecast domestic passenger number would grow during the present financial year, with capacity increases from Air New Zealand and Jetstar services.
