Financial Report 2019-20
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Darwin Alice Springs Tennant Creek A Airport Development Group International Airport Airport Airport Financial Report 20 Highlights 2019–20 Throughout the COVID 19 pandemic ADG has maintained our commitment to and support of: • Our staff and permanent contractors: by providing ongoing employment • The community: by continuing to fund all our sponsorships • The Northern Territory: by continuing to make significant capital investments • Our customers and key stakeholders: by providing relief packages. ADG has commenced a With sustainability a top The cold storage, freight $5 million dollar expansion priority for ADG, and we and training facility at in renewable energy, continue working towards Darwin International increasing solar PV arrays an emissions target to have Airport has been completed, from 7MW to 11MW. zero net emissions (scope 1 signalling new importing and and scope 2) by 2030. exporting opportunities for the Territory. Throughout the pandemic, all three of our airports – A new community Darwin International, Alice partnership began, which From the start of the pandemic Springs and Tennant Creek – sees Larrakia Rangers we provided 31 stakeholder have stayed open. working with Darwin updates to more than International Airport to 780 airport stakeholders maintain the health of the every week. All staff employed across Rapid Creek Reserve in the our airports retained their airport lease area. positions during COVID-19. Major upgrades at Tennant Creek Airport to improve Darwin International Airport fencing and lighting have The Alice Springs Airport purchased two all-electric also been completed. Preliminary Draft 2020 fleet vehicles that utilise Master Plan was released renewable energy generated in May 2020 for public on-airport. For the first time in history, comment. The Plan includes Alice Springs welcomed the the Airport Environment world’s largest passenger plane, the A380, which Strategy and acts as a Through ADG’s staff giving is being stored at the blueprint for Alice Springs program we donated Asia Pacific Airport Airport’s development over $16,000 to Orange Sky the next 20 years. Australia, which provides a Storage facility. regular laundry and shower service for disadvantaged Territorians through its We introduced the van, ‘Betsy’. CEO Contractor Annual Safety Award. Airport Development Group 1 Vision, purpose and values Our vision Our purpose Our values To be the preferred partner for strategic To enhance the lives of all Territorians, We recognise that stakeholders and the infrastructure development and enable education and employment community judge us by the way we act. management. opportunities for Indigenous Australians Our reputation is paramount, and as and provide an annuity style return to a result, we will act with honesty at all shareholders. times with our workplace reflecting our corporate values. We will achieve this by: We will do this by: Safety We will ensure a safe environment is › Earning, and retaining, the trust of › Investing in major infrastructure, maintained for all. Territorians including airports, tourism, utilities and property for the benefit of all Our People › Leveraging our strong financial position Territorians We care and respect our teams, our to broaden our business scope and customers, and our partners. diversifying our portfolio › Showing leadership in renewable energy through investment, policy development › Leveraging the significant infrastructure Sustainability and target setting capability of our owners We act now to protect our future. › Facilitating education, training › Researching and developing new and employment opportunities for Innovation strategic partnerships Indigenous peoples across ADG assets We embrace new ideas and thinking. › Identifying opportunities and and sponsorships partnerships to invest in new products Passion › Celebrating and promoting Indigenous and services. We are proud, enthusiastic and have fun. culture across all ADG assets. 2 ADG Annual Report About ADG approximately $3 billion in funds under management. Palisade focus solely on investment acquisition and management, and The Airport Development Group (ADG) long-term sustainable returns in Australia. Palisade’s assets has been part of the Northern Territory include airports, ports, rail and renewables. community for over two decades and is one of Northern Australia’s largest companies. COVID-19 disclaimer As part of Australia’s airport privatisation In December 2019, China reported cases of a viral pneumonia program, ADG acquired leases from the caused by a previously unknown pathogen. The pathogen was Australian Government for three major identified as a novel (new) coronavirus – the illness now known Northern Territory airports—Darwin as Coronavirus disease 2019 (COVID-19). In response to limiting International Airport, Alice Springs Airport the spread of the virus in Australia, strict border controls were and Tennant Creek Airport—in June 1998. enacted. Each lease is for 50 years, with an option of a further 49-year lease. The 2019/20 Operational Overview and Sustainability Data has been prepared with care based on the information available at ADG owns and operates these airports, the time of writing. has significant investments across hotels, property and utilities, and will continue Some content relates to the period before the COVID-19 to invest in major infrastructure projects pandemic, and some is about events and activities during the across the Top End that will improve the pandemic to 30 June 2020. The Overview and Data also contains lives of all Territorians. some images taken before social distancing measures were put in place. ADG is 100% Australian owned via our investment fund shareholders IFM Investors (77.4%) and Palisade Our response to COVID-19 Investment Partners Limited (22.6%). At 2019/20 financial year end, ADG was closely monitoring Through these shareholders, ADG directly COVID-19 and implementing a thorough response to manage contributes to the retirement savings of the rapidly changing situation. Measures put in place to ensure approximately 70,000 Territorians via their the safety of staff, contractors, visitors and travellers during the superannuation funds. pandemic included: ADG has 85 full-time employees and many › increased personal protective equipment for security personnel other contractors providing key airport at screening points, including masks, gloves and hand sanitiser services and generating a total direct and indirect jobs for 1600 Territorians. 1.9 › increased hygiene protocols and mandatory mask wearing for million passengers travelled through the visitors and workers in the terminal three airports in 2019–20. › temporary closure of food, beverage and retail outlets › visual cues for social distancing at congregation areas, such as About IFM Investors (IFM) baggage claim – own 77% of ADG › rollout of health messaging in terminals IFM represents an estimated 30 million › reduced operating hours and restricted access to the terminal pension fund members across 26 Australian superannuation funds and › support for tenants, including relief packages has approximately $155 billion in funds › establishing a community hotline under management. The company believe in long-term responsible and › regular communication and updates to airport stakeholders sustainable investments that enhance › providing ADG staff with the option to work from home people’s retirement outcomes and has 4 major asset classes, infrastructure, debt › complying with the National Code of Conduct SME Commercial investments, listed equities and private Leasing Principles equity. ADG continues to work closely with authorities and follow guidance from the Northern Territory and Australian About Palisade Investment governments. Partners (Palisade) – own 23% of ADG An independent, specialist investment manager Palisade invests the retirement savings of 2.5 million Australians and has Airport2019–20 Development AirportADG Annual Development Group Report Group About ADG / Contents 3 Year in brief New routes Darwin International Airport Qantas Broome 2019 20 Passenger growth % -(2019:28.6 NEGATIVE 5.5%) Revenue growth Passengers (including transfers) % International -17.1ON THE PREVIOUS YEAR: 2.0% 226,200LAST YEAR: 293,100 Revenue M Total domestic Northern Territory $105.1LAST YEAR: $126.7M 1,683,300LAST YEAR: 2,382,300 EBITDA Total passengers by airport Darwin M International Airport $LAST YEAR:58.2 $81.3M 1,507,500LAST YEAR: 2,046,500 Alice Springs M Airport $561 398,000LAST YEAR: 622,000 invested in capital works since 1998 4 2017–18 CEO’s report COVID-19 is an ongoing issue, and we It has been a challenging year for Airport have learnt valuable lessons from it Development Group and the aviation and achieved outcomes that will have industry as we navigate the impacts of the ongoing benefits for our employees, such as flexible working arrangements. COVID-19 pandemic. At year end, ADG remained financially We are proud of the commitment we made strong, which required careful during this difficult time to retain all our management, sacrifice and flexibility from everyone across the organisation. employees, and that we were able to keep all three airports open. The wellbeing and While airport operations were slower in 2019–20 than usual, many key projects safety of our employees, contractors and were still able to be completed this visitors remained our top priority, and we financial year. worked hard to ensure people felt safe and Construction of a 6250sqm cold storage, protected