The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is on watch after the airport business delivered its FY21 half-year result.
Sydney Airport’s HY21 result
The airport operator revealed that it saw 6 million passenger in the half-year, which was a decline of 36.4% compared to the prior corresponding period. Remember, January 2020 and February 2020 were largely undisturbed by COVID-19 impacts.
International passengers declined by 91% whilst domestic passengers dropped by just 3.1%.
Sydney Airport was able to generate EBITDA (EBITDA explained) of $210.8 million for the six months. This was a decline of 29.8%.
Net operating receipts amounted to $1.8 million, down 98%. But it was impressive that it managed to generate a positive number.
However, the statutory loss after tax was $97.4 million for the year.
Sydney Airport said that tight cost control resulted in operating expenses of $74.2 million down 7.8% year on year.
Balance sheet and capital spending
It spent $65.2 million on capital investing, which management said was disciplined and focused on critical projects.
Sydney Airport said it had a strong balance sheet at the end of the period, with $2.9 billion of liquidity.
Other highlights
The airport operator said it has welcomed 12 new global luxury brands to reinvigorate its luxury retail precinct. That included Louis Vuitton, Saint Laurent, Dior and Prada.
Sydney Airport also said that over 100 hectares of land is under active planning for a development pipeline.
It continues to negotiate short-term agreements with airlines such as Qantas Airways Limited (ASX: QAN).
July 2021 traffic performance
Sydney Airport also released its July traffic performance. As you’d expect, the NSW lockdown (and lockdowns in other states) are having a big effect.
Year on year, domestic passenger travel was down 75.1% to 69,000. International travel was only down 20.9% to 33,000 because international borders were also shut in July 2020. That meant total passengers were down 67.9% to 102,000.
Outlook for Sydney Airport and the share price
Sydney Airport said that the trajectory seen before the restrictions, and the steps taken to protext the business, gave management confidence for navigating the recovery.
But, due to the uncertainty, it decided not to give any distribution guidance.
The airport operator points to the vaccine rollout as the path to lifting restrictions, which could then lead to domestic and international travel coming back.
It will be interesting to see what happens to the Sydney Airport share price in the coming months considering it recently rejected a takeover bid from a consortium at $8.45 per share. Seeing as it’s not paying a distribution right now, it can’t really count as one of the ASX dividend shares right now.