19 Nov 3% for international and domestic traffic respectively
S Revises Auckland Airport Otlk To Positive
(The following was released by the rating agency) Auckland Airport new pricing framework for the next five years will provide greater clarity on its revenue. In addition, the airport is reviewing any potential discount moncler jackets investment in a new domestic passenger facility, which will include further consultation with the airlines over the implications for airport charges.
The temporary postponement of the large capital expenditures toward the middle to second half of the decade will sustain the airport financial metrics at cheap moncler jackets above our prior expectations.
As a result, we are revising our rating outlook to positive from stable, and affirming the ratings on the airport. 27, 2012, Standard Poor Ratings Services revised its outlook on Auckland International Airport Ltd. The deferral moncler sale outlet is due to the airport further consultation with airlines regarding the implications for airport charges. Under our previous forecasts, we had assumed a significant step up in capital expenditure over the coming five years. The airport had planned to construct a new domestic terminal during the period, and start works on a second Northern runway at the end cheap moncler jackets womens of the five year period. As part of its consultation with the airlines regarding its proposed new tariffs, AIAL has instead decided to pursue a shorter term, less capital intensive solution concerning the congestion issues at the existing domestic terminal until the longer term new terminal facility plans are cheap moncler sale finalized. In addition, work on the second runway is unlikely to start until the later part of this decade. As a result, we have lowered our capital expenditure forecast for the next three years by about NZ$125 million, or 20% in aggregate compared to our prior estimate. We thus expect AIAL debt to be less by about NZ$100 moncler uk outlet million by 2015.
The lower debt level will moncler outlet store improve AIAL key financial metrics, despite its recent decision to increase its dividend payout ratio to 100% of net profit after tax, from 90% cheap moncler coats mens previously. We believe the compound annual growth rate will be modest over the next three years at 2.6% and 1.3% for international and domestic traffic respectively, compared to moncler usa a corresponding compound annual growth rate over the uk moncler outlet past five years of 4.4% and 2.1%, respectively. We therefore expect financial metrics to remain significantly above the company stated targets of funds from operations (FFO) to debt of more than 15% and FFO interest coverage of moncler womens jackets greater than 3.5x. In fact, we believe the ratios will remain only marginally below the fiscal 2012 levels of 19% moncler sale online and 4x. We view these levels as commensurate with a rating, all else being equal.
We continue to view AIAL business risk profile as This is based on AIAL position as the major international gateway to New Zealand, and its reasonably large direct catchment area relative to other New Zealand peers, which covers about 30% of the country population. Furthermore, AIAL has moncler outlet sale the country largest range of international air related services, with substantial origin and destination traffic from relatively diverse geographic and passenger bases. The airport has uk moncler sale a larger exposure to international moncler sale passengers than peers (about 7.77 million in fiscal 2012 compared to domestic traffic of about 6.24 million) a segment that monlcer down jackets can support growth but also exposes the airport to external events and economic conditions.
The airport also holds moncler outlet woodbury minority stakes in North Queensland Airports (the owner and operator of Cairns and Mackay airports in northeast Australia) and New Zealand Queenstown Airport. Although these shareholdings currently make up a small proportion of the airport total earnings, we believe the ownership interests and moncler outlet expected increased moncler online store contributions cheap moncler jackets mens expose the airport metrics to potential underperformance from these investments.
We believe that there remains some uncertainty around the regulatory regime covering the New Zealand airport sector, mainly following the recent publication by the Commerce Commission of a Process and Issues Paper seeking to confirm the effectiveness of the current light handed regime. This process is conducted for each airport independently and could lead to changes in regulation, although we believe that AIAL is not overexposed to this risk.
The ratings on AIAL reflect our opinion of the company natural monopoly business, its diverse revenue stream, and the airport trend of robust passenger demand.
AIAL has NZ$50 million of debt maturing in late 2012, but has significant undrawn bank facilities to cover that amount.
In the event of a 30% drop of EBITDA, net sources would remain positive. Compliance with covenants under its debt documents would be maintained in that scenario.
In our analysis, we have assumed liquidity exceeding NZ$450 million over the next 12 months, comprising cash on hand, FFO, and available committed bank facilities. Should shareholder distributions remain stable, we consider that the company can sustain this buffer over its policy targets. This is despite the company undertaking partially debt funded capital expenditure over the next two monclerdownjacket to three years. The outlook also reflects our view that AIAL will maintain moncler outlet prices its strong business risk profile.
The short term and long term ratings could be raised by best moncler jackets one notch in the next 12 months if:
The Commerce Commission does not seek to materially change the current regulatory framework, and instead keeps the current light handed regime.
We gain sufficient comfort that the company intends to maintain a significant buffer above its financial metrics targets and not seek to implement any shareholder friendly capital management measures with the improvement in its financial metrics.
The expected moncler outlet online appointment of a new CEO in the coming months will not lead to a material change in the company overall strategy such that it weakens the airport business or financial risk profiles.