Sydney Airport Holdings Pty Ltd (ASX: SYD) revealed its December 2018 passenger numbers today, with a 0.1% drop in total passengers when compared to December 2017.
Sydney Airport Holdings is the company that operates the Kingsford Smith Airport, it currently has a 99-year lease on the airport but it will revert back to government ownership at the end of this century. According to Sydney Airport, it generates $30.8 billion in economic activity a year, which is equivalent to 6.4% of the NSW economy.
Sydney Airport December 2018 Passenger Update
Total passenger numbers fell by 0.1% in December 2018 when compared to the same month last year. Domestic passengers fell by 2.6%, however international passenger numbers grew by 3.7%.
Sydney Airport said that cancellations due to storms and adverse weather activity impacted the domestic passenger movements for the month.
The year to date performance showed positive numbers across the board with domestic passengers up by 1.2% and international passengers up 4.7%. This brings the total year to date growth to 2.5% when compared to the previous year.
Sydney Airport CEO Geoff Culbert said, “2018 was another record year for Sydney Airport with 44.4 million passengers travelling through our three terminals, an increase of 2.5% compared to 2017. Our strong growth has been underpinned by international capacity increases representing 1.2 million additional seats.”
Is Sydney Airport A Buy?
The market didn’t seem to respond well to this passenger update. The share price has dropped 2.8%, representing the lowest price since early November 2018.
Income investors might find the 5.8% dividend yield attractive. However I would want to see domestic passenger numbers stabilise before considering an investment.
Three out of the last four passenger updates have shown negative domestic numbers growth. I would question whether this is a continuing trend, if it will continue to affect the share price and ultimately Sydney Airport’s profits.
If you’re feeling unsure on Sydney Airport too then the three shares in our free report below could be worth considering for your next investment.
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