The Airports Company South Africa (Acsa), which is 74.6% directly owned by the national government, reported on Wednesday that it had, over the past few months, significantly improved its financial situation and obtained funding to increase its liquidity. Whereas, in the middle of last year, it had estimated that it would need funding support of up to R4-billion up to and including the 2023/24 financial year (FY), now it believed it would need only R600-million, and that only in FY 2023/24.
“We are in a much better place than we were in mid-2020,” assured Acsa CEO Mpumi Mpofu. “While there is still a great deal of uncertainty about a recovery in air travel, we have successfully implemented most of the commitments we made in response to the impact of Covid-19 and are on track with further measures.”
The Covid-19 pandemic, and the national lockdowns and air travel restrictions imposed to try and contain it, have hit Acsa hard. Thus, while in the first half of FY 2019/20 the company accrued revenues of R3.5-billion, the figure for the first half of FY 2020/21 was just R685-million. Profits during the first semester of FY 2019/20 came to R125-million, but during the first semester of FY 2020/21 the company sustained losses of R1.47-billion.
In terms of passengers, Acsa airports handled 21.6-million departing passengers in 2019 but only 7.4-million in 2020 – a drop of 65.8%. The fall in passengers departing on international flights was 74.6%, while the figure for domestic passengers was 61.9%. Moreover, the number of seats available on international and domestic flights last year was only 41% of that for 2019. So far this year, the number of airline seats being made available in South Africa is 74% of the number for the same period in 2019.
To meet the crisis, Acsa has deferred infrastructure projects worth R14.5-billion, committed to reducing its annual operating expenditure by R1.2-billion, and has capped its annual maintenance and refurbishment budget (essential to keeping its airports safe and efficient) at R1-billion.
The company issued R2.3-billion in preference shares, which were taken up by the South African government, and has obtained R3-billion in short-term banking facilities as well as negotiating a loan of R810-million from the Development Bank of Southern Africa. The Agence Française de Développement has granted Acsa a waiver on its financial commitments, until June 2022.
It achieved a net gain, after tax, of R1.27-billion from the sale of its 10% holding in the Mumbai International Airport in India. And it was considering an offer for its share in Guarulhos International Airport in São Paulo, Brazil. Acsa had also started the process to potentially monetise some of its investment property portfolio, which was worth R7.7-billion.
“Our vision remains to be the most sought-after partner in the world for the provision of sustainable airport management solutions by 2030,” affirmed Acsa CFO Siphamandla Mthethwa. “In spite of the tight focus on immediate priorities, we have in place a strategy that will take us through the recovery and into renewed growth over the next nine years.”