1b yuan rent slashes Beijing Capital net

PUBLISHED : Monday, 27 April, 2009, 12:00am
UPDATED : Monday, 27 April, 2009, 12:00am

Beijing Capital International Airport reported a 92.4 per cent profit drop for last year as it paid a substantial fee to the parent for using the newly built Terminal 3.

The airport operator said yesterday it earned 85.33 million yuan (HK$96.86 million) or 2 fen per share last year, compared with 1.13 billion yuan or 28 fen a share in 2007.

Revenue jumped 31.5 per cent to 4.62 billion yuan, benefiting from the rise in passenger numbers when Beijing hosted the Olympic Games last year.

However, the Hong Kong-listed company paid a rental fee of 1.08 billion yuan to the parent, Capital Airports Holding, for using Terminal 3, the world's largest stand-alone airport.

The airport operator agreed to buy the new building and the related assets at the end of 2006, but the deal was not completed until October last year, as it was subject to the regulator's approval.

The company told the Hong Kong stock exchange the rent covered the period between the start of operations on March 26, 2008 and October 1, 2008, when the acquisition was completed.

Beijing Capital International Airport also announced the price for the terminal was set at 26.94 billion yuan, 22 per cent more than previously expected, owing to asset appreciation and interest costs.

The new terminal would help the operator boost its handling capacity by 150 per cent to 90 million passengers and double its retail area.

Capital Airports had planned to launch an A-share initial public offering in the first half of this year to fund the acquisition, but the regulator's ban on initial public offerings since September has deterred it from raising capital from the domestic market.

Last month, the airport operator saw passenger traffic grow 18.7 per cent from a year ago to 5.22 million passengers and cargo throughput grow 3.6 per cent to 66,248 tonnes. For the first quarter, passenger volume jumped 21.8 per cent from a year earlier.

Profit chopped

As a result of having to pay rent to its parent, the company's net profit fell: 92.4%