irports Company South Africa (ACSA), one of the few South African State-owned companies that has been able to keep itself financially healthy, reported recently that, despite declines in its revenues, profits, and earnings before interest, taxes, depreciation and amortisation (Ebitda), it was still financially sound.

“Financially, we are very sound,” assured ACSA acting CFO Dirk Kunz. It reported revenues for the 2017/18 financial year (which ended on March 31) of R6.9-billion, profits of R0.8-billion and Ebitda of R3-billion. The respective figures for the 2016/17 financial year were R8.6-billion, R2-billion and R5.1-billion. These falls were largely due to a cut of 35.5% in the aeronautical charges ACSA was allowed to levy.

On the other hand, the company had been able to cut its debt ratio from 24% in 2016/17 to 22% in 2017/18. In numbers, ACSA’s debt fell from R13-billion in 2013/14 to R9-billion in 2017/18. (Its debt ratio in 2013/14 was 48%.)

In terms of its sources of revenue, its aeronautical revenue fell almost exactly in line with the reduction in its aeronautical charges. Thus, income from landing fees and aircraft parking fees both fell by 35%, while income from passenger service charges was down 33%. Its nonaeronautical revenues rose by 5%.

“We did have some time to plan for lower tariffs, but these plans had to be firmly managed, while coping with only moderate domestic passenger growth,” observed ACSA CEO Bongani Maseko. Domestic aircraft landing volumes declined by 1% and the figure for regional flights was stagnant, but international aircraft landing volumes increased by 3%. The number of unscheduled (charter) landings fell by 19%.

Regarding departing passengers, domestic volumes rose by 4% (showing that domestic airliners were flying with higher load factors), regional volumes declined by 1% and international volumes went up by 5%. The number of passengers leaving on unscheduled flights went down by 2%.

The company’s top five expenses were (from largest to smallest) employee costs, which came to R1 402 000 (up 4% on the previous year); utilities, R634 000 (increasing by 6%); repairs and maintenance, R377 000 (jumping 17%); security, R296 000 (a rise of 7%); information systems, R287 000 (rocketing 50%) and impairment of receivables (which fell by 17% to R50 000). “We are pleased to have been able to keep a firm hold on costs in spite of severe pressure on utilities such as electricity and water,” he stated.

“Government is not supporting us financially at all,” highlighted Kunz. “We’ve been able to run the business profitably over the past few years.”

The company would have liked the cut in its aeronautical charges to have been phased in over more than one year. That did not happen. “At least, for the next three years, we’ve got some certainty about our revenue base,” he said. As a result, it could now start making new investments. “We are going into a growth phase,” assured Maseko. “Over the next two to three years, we’re going to be able to invest in our infrastructure from our balance sheet. But, after that, we’re going to have to go back to the market.”

ACSA owns and operates nine airports in South Africa. It also provides advisory and consultancy services for airports owned by other entities. Internationally, it has equity investments in Guarulhos International Airport, in São Paulo, Brazil, and in Chhatrapati Shivaji International Airport, in Mumbai, India. It also provides technical advisory and consultancy services for Kotoka International Airport, in Accra, Ghana. Mumbai made a profit during 2017/18, while Guarulhos cut its losses by R481-million.