Hong Kong airport has staged a strong post-pandemic recovery, bouncing back to a net profit of HK$1.61 billion in 2023-24 after three straight years of losses, with its management reviewing its debt repayments amid a high-interest-rate regime.
Operator the Airport Authority of Hong Kong, which released its annual results on Wednesday, attributed the stellar performance for the financial year ending March 31 to the gradual resumption of passenger traffic, cargo and airmail throughput and retailing operations.
Still, net profit was well below pre-pandemic levels, at about 27.5 per cent of the HK$5.86 billion reported in 2019-20. Revenue jumped 66.5 per cent year on year to HK$13.68 billion, or 80 per cent of the pre-pandemic level.
Most of the airport’s revenue – 59 per cent or HK$8.06 billion – came from non-aeronautical income.
Revenue from duty-free licensees, retailers, food and beverage outlets and advertising, jumped 423.5 per cent to HK$3.93 billion in 2023-24 or 28.8 per cent of the total.
The airport’s management attributed the increase to shops and restaurants reopening in Terminal 1 following a gradual increase in passenger traffic, a revamped and upgraded luxury shopping zone and a new food court.
Cargo throughput and airmail jumped 9.1 per cent to 4.5 million tonnes.
Despite the strong results, the airport has relied on external financing such as debt and bonds to fund the construction of its third runway, and the debts are piling up.
Total debt to capital ratio edged up to 56 per cent last year from 53 per cent in 2022-23.
As of the end of March, the authority’s total external financing stood at HK$124 billion.
“The external financing for the third runway system project has been substantially completed, and the external financial level is expected to be stabilised,” it said.
“The authority is currently exploring ways to enhance its financial position, through reviewing its assets, external borrowings and asset-liability mix.”
It said it would proactively review debt repayment and future financing needs to support the overall operations and future development of airport authority.
The annual report also revealed Fred Lam Tin-fuk, promoted to chairman in June from CEO, was the authority’s highest earner in 2023-24, taking home HK$11.37 million or 2.1 per cent more than a year before.
The authority’s other investments saw mixed performances. It shared a HK$508 million loss over its 35 per cent-owned Hangzhou Xiaoshan International Airport in Zhejiang, largely because of higher infrastructure expenses.
However, Zhuhai airport, in which it has a 55 per cent stake, generated a profit of HK$46 million for the authority.
