ANNUAL REPORT 2018 SECTION 1. PAGE 1 SECTION 1 2 4 10 11 COMPANY OUR YEAR AT A CHAIRMAN PARTICULARS PLACE GLANCE AND CEO’S REPORT SECTION 2 2 15 16 17 STATEMENT TREND STATEMENT OF BALANCE OF SERVICE STATEMENT COMPREHENSIVE SHEET PERFORMANCE INCOME & STATEMENT OF CHANGES IN EQUITY 18 19 30 32 STATEMENT OF NOTES TO THE SHAREHOLDER AUDIT CASH FLOWS FINANCIAL INFORMATION REPORT STATEMENTS SECTION 1. PAGE 2 OUR COMPANY PARTICULARS DIRECTORS CHIEF EXECUTIVE REGISTERED OFFICE Terminal Building Stuart J McLauchlan R Roberts BCom, FCA(PP), AFInstD (Chairman) BEng (Hons) , MInstD Dunedin International Airport Private Bag 1922 DUNEDIN Tony Allison GENERAL MANAGER BCom, BA, CA, CMInstD COMMERCIAL Phone 03 486 2879 E-mail [email protected] Patricia (Trish) A Oakley C Cope Website www.dunedinairport.co.nz BCom, CMInstD BCom, Dip Grad, CA, MInstD Mark F Rogers BANKER A(Hons), CMInstD, MNZIM GENERAL MANAGER INFRASTRUCTURE & Westpac SERVICE DELIVERY 101 George Street COMMITTEES DUNEDIN S Casey Audit Committee Chairperson - Tony Allison, SOLICITORS GENERAL MANAGER Stuart McLauchlan Gallaway Cook Allan BUSINESS DEVELOPMENT 123 Vogel Street Remuneration Committee DUNEDIN Chairperson- Trish Oakley, M Crawford Mark Rogers BA, BCom , MInstD AUDITOR Health and Safety Committee Julian Tan of Audit NZ Chairperson – Mark Rogers, On behalf of the Auditor-General Stuart McLauchlan, Trish Oakley, Tony Allison SECTION 1. PAGE 3 AIRLINES FOR THE YEAR ENDED 30 JUNE 2018 AIRLINE AIRCRAFT TYPE DOMESTIC Air New Zealand Airbus 320-200 Air New Zealand Boeing 737-300 Mount Cook Airline ATR 72 Air Nelson Dash 8-300 Jetstar Airbus 320-200 INTERNATIONAL Virgin Australia Boeing 737-800 CHARTER, FLIGHT TRAINING AND COMMUTERS Mainland Air Services Cessna 152 Piper PA31-350 Chieftain Piper PA34-200 Seneca Socata TB10 Tobago SECTION 1. PAGE 4 OUR PLACE DUNEDIN, NEW ZEALAND SECTION 1. PAGE 5 It’s hard to imagine that one Dunedin, New Zealand’s first city destination can have some of the is set amidst a magical landscape best and most unique wildlife viewing edged by the sea. Here the streets in the world, an impressive array of hum vibrantly with colour and culture, heritage architecture and be home and the beauty of nature can still be to world class fashion designers. But found - everywhere. It is a thriving city there is such a destination, Dunedin. of rare charm. SECTION 1. PAGE 6 OUR DIRECTORS Tony Allison Stuart J McLauchlan Patricia (Trish) A Oakley Mark F Rogers Bcom, BA, CA, CMinstD BCom, FCA(PP), AF Inst D BCom, M Inst D BA(Hons), M Inst D, MNZIM (Chairperson – Audit (Chairman, Member – (Chairperson - (Chairperson – Health and Committee). Audit Committee) Remuneration Committee) Safety Committee) SECTION 1. PAGE 7 SECTION 1. PAGE 8 OUR EXECUTIVE LEADERSHIP TEAM GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER CHIEF EXECUTIVE COMMERCIAL BUSINESS INFRASTRUCTURE & R Roberts DEVELOPMENT SERVICE DELIVERY BEng (Hons), MInstD C Cope S Casey BCom, Dip Grad, CA, M Crawford MInstD BA, BCom, MInstD SECTION 1. PAGE 9 SECTION 1. PAGE 10 THE YEAR AT A GLANCE TOTAL PASSENGERS INTERNATIONAL DOMESTIC DOWN UP 3.6% 6.4% 5.9% 1,030,512 UP 44,166 986,346 INTERNATIONAL DOMESTIC BUSIEST MONTH ON RECORD CAPACITY CAPACITY MARCH 2018 DOWN UP 5.1% 4.5% 95,163 FINANCIAL SUMMARY OPERATING SURPLUS AERO This summary should be read in conjunction with the full financial AFTER TAX REVENUE statements in section 2 or online at www.dunedinairport.co.nz 39.9% UP OPERATING REVENUE 16.9% 41.1% UP 16.5M UP 3.3M 7.3M TOTAL DECLARED SHAREHOLDERS NON AERO +Others DIVIDEND FUNDS REVENUE FOR THE YEAR UP UP 3.7% 6.4% $1,408,000 61.8M 9.3M SECTION 1. PAGE 11 CHAIRMAN AND CEO’S REPORT The Directors and Management are pleased to present this year’s Annual Report. Dunedin Airport has seen another year of significant growth. It has been a very exciting and rewarding year, and we are looking forward with great optimism. Reflecting back on the year, we must pay thanks to our team who have worked tirelessly in delivering some significant projects to improve the experience for our growing numbers of customers and team. We seek out new team members who align with our ever-present values, which is essential to deliver our value-based leadership model. The next few years present challenges for us all, but we feel comfortable and confident that we have the right mix on board to ensure we deliver success together. CONNECTING OUR PLACE, TO MORE PEOPLE, IN THE BEST WAY EVERYDAY OUR BRAND VALUES OF BE YOU BETTER TOGETHER CAN DO MAKE IT EASY WE CARE MAKE IT HAPPEN TO MAKE SAFETY & TO BE TO OPTIMISE THE INCREASE PASSENGER SECURITY OUR FIRST ENVIRONMENTALLY COMMERCIAL NUMBERS PRIORITY RESPONSIBLE RETURN TO OUR SHAREHOLDERS TO DEVELOP & PROVIDE THE TO BE A GREAT PLACE TO CONNECT & STRENGTHEN OUR BEST CUSTOMER TO WORK ENGAGE WITH PARTNERSHIPS EXPERIENCE OUR PLACE SECTION 1. PAGE 12 In January 2018 we welcomed our Aeronautical revenue of $7,287,000, one millionth passenger. This was which constituted 44.1% of total a major milestone and represented revenue, was 39.9% ahead of the a 45% increase in passenger previous year. In March 2017 we movements through the airport commenced consultation with In terms of passenger over the last ten years. The total our airline customers on airport numbers of passengers for the year charges for regular passenger numbers, 2017 - 2018 was was 1,030,512 which represents an transport (RPT) operators at another record year for increase of 5.9% on the previous Dunedin Airport. It is a legislative the airport. year and follows on from a 7.0% requirement under The Airport increase in the 2016 – 2017 year. Authorities Act 1966 that all airport companies consult over charges This year’s domestic capacity has with all substantial customers, increased by 4.5% (1,208,758 seats) before any new or altered charges with a corresponding increase are implemented. The previous in passengers of 6.4% to 986,346 landing charges consultation compared to the previous year. occurred in 2011. The consultation International capacity declined by process was successfully concluded 5.1% with a corresponding decline in in June 2017 with updated airport international passenger numbers by charges taking effect from 1 July 3.6% during this period to 44,166. 2017. These changes, in addition to There remains strong demand for increasing passenger numbers, had services through Dunedin Airport. a significant positive impact on the Last year we reported that our 2017 – 2018 aeronautical revenue. busiest month on record was March Non-aeronautical income 2017, with 87,730 passengers. (excluding interest income, This record was surpassed three dividends received, gain on sale times this year, with March 2018 at of fixed assets, and fair value 95,163, our new busiest month on movements of investments) record. increased 6.4% above last year to $9,273,000. This revenue stream is Dunedin Airport’s total revenue derived from passenger activities, increased by 16.9% to $16,522,000 retail, property, car parking and the and the after-tax operating surplus airport’s dairy farming operations was $3,725,000, surpassing last year and constitutes 56.1% of our total by $954,000, or 41.1%. revenue. SECTION 1. PAGE 13 The dividend declared at the the announcement both airlines 2017 Annual General Meeting and have adjusted their trans-Tasman distributed to shareholders during schedules and reviewed their the 2018 financial year remained strategies on the highly competitive in line with the previous year and CONNECTING MORE PEOPLE trans-Tasman routes. We are forecasts at $1,408,000. We were very proud to see our treating our existing services as a new route, and new relationship, Dunedin Airport shareholders’ one millionth passenger arrive and we aim to provide all that we funds increased by $2,222,000, or into Dunedin on the 31st January. can to support and grow both 3.7%, to $61,781,000. This increase It was an amazing team effort frequency and destinations to and is the result of the current year that enabled us to celebrate this from our region. operating surplus, offset by dividend important occasion in a very distributions. “Dunedin” way! Each passenger Our trans-Tasman passenger from flight NZ675 from Auckland numbers remain under pressure. Notwithstanding current year was treated to Dunedin gifts This is the result of a number capital expenditure of $3,468,000, including Emersons beer, Ocho of factors including competing early in the 2017 – 2018 financial chocolate and other local goodies. and cost-effective international year it became apparent that All gifts were either donated or destinations, awareness of the the timing of budgeted capital heavily discounted which was a Virgin Australia product in New expenditure was not indicative wonderful demonstration of the Zealand, and a frequency of less of the likely timing of incurred many partnerships Dunedin Airport than a daily service which will costs. Notable variances include has within the City. The 1 millionth always affect volume and market a 2018 financial year budget passenger received a gift of two presence. for the Terminal Expansion tickets to the Pink Concert donated Project (refer narration below) of These remain challenges for us in by Dunedin Venues Management $6,700,000 compared to a 2018 this market and our aim is always Limited including flights to Dunedin spend of $600,000, and a 2018 to improve our international which were provided by Air New budget of $2,800,000 for the passenger trends against these Zealand. carpark expansion (refer narration market challenges. The importance below) compared to a 2018 spend Our strategy remains focused on of a strong destination message of $1,700,000.