ACSA registers R1billion losses but bosses say ‘they’re on the road to recovery’

State-owned Airports Company South Africa (ACSA) has tabled its financial report but things are not going well as they reported a loss of R1 billion for the 2021/22 financial year.

The losses are an improvement on the R2.6-billion loss reported in the previous financial year according to its officials.

ACSA CEO Mpumi Mpofu was speaking during ACSA’s year-end financial results presentation on Thursday, and said the year’s performance was, overall, much better than the previous two years,

Even though a persistently tough operating environment had somewhat slowed down recovery, the company found some relief on its financials.

Overall, the company reported an improvement in financial performance and outlook over the previous year. The performance was, however, affected by two waves of Covid-19 and civil unrest in July last year.

“ACSA has shown much resilience and agility, perseverance and responsiveness to the curve balls and twists that characterised the Covid-19 year,” said Mpofu.

“We are in a strong position with indicators showing an upward trajectory and recovery on the back of a very prudent strategy, tactics, and tactical manoeuvres informed by world best practice.”

As per the report, overall traffic volumes more than doubled compared with the previous year but remained far below pre-pandemic levels.

Mpofu said this was because domestic and regional traffic recovering to 58% and 36% of pre-pandemic levels, respectively. 

However, she noted that international traffic was hampered by the impact of travel restrictions and the onset of the Omicron variant in the third quarter of the financial year and, therefore, only recovered to 29% of pre-pandemic levels.

ACSA reported R3.9-billion in revenue for the year, which was up 81% from the R2.2-billion reported in the 2020/21 financial year. 

The airports company also reported positive earnings before interest, taxation, depreciation, and amortisation (Ebitda) of R342 million for the financial year in review, which was a significant improvement over the loss before taxes, appreciation, and amortisation of R1.8-billion in the prior year.

ACSA Chief Financial Officer Siphamandla Mthethwa said with a target of R973 million, the company only spent R546 million for the year, which he attributed to “implementation challenges”.

“The cost of separation packages during the two-year period was about R300 million. The savings in employee costs is R500 million per annum,” he said.

“We were still unfortunately unable to finalise that in the financial year and I cannot at this stage give any definite timeline on that. However, if you look at our financial plan for the next three years, we have factored that support into the plan.”

Furthermore, Mthethwa said the overall financial position of the company remained robust, with a strong asset base and relatively low levels of debt.

In contrast, the CFO explained that aeronautical revenue improved significantly by 121.7% year-on-year, from R810 million to R1.8-billion. The improvement was owing to an increase in aircraft landings and departing passenger numbers.

“In terms of aeronautical revenue, ACSA performed better than the previous year by 57.1% to R2.1-billion, up from R1.3-billion, which took into account rental revenue reprieves for struggling customers of R591-million, which was significantly less than the R1.4-billion in reprieves from the previous year that were granted to tenants to offset the negative impact of the pandemic,” reported Engineering News.

Main Image: ACSA/Bloomberg