Sydney Airport reports $146 million loss

[Mal]

Interest bill on $8b debt pushes Sydney Airport into the red

SYDNEY AIRPORT has added to the jitters surrounding the state of its financial health, after it reported a $146 million loss and a blow-out in the interest bill on its $8.1 billion of debt.

Its full-year accounts show its income fell well short of its interest bill last year, offering a possible explanation why its major shareholder, Macquarie Airports, announced last week it would divert the bulk of an intended $1 billion share buyback as an equity injection into the airport.

 

[JohnK]

I cannot comprehend how Sydney airport could be making a loss with all the gouging going on.

 

[one9]

Yes I am also quite surprised.

 

[Mal]

I cannot comprehend how Sydney airport could be making a loss with all the gouging going on.

I suggest it's something like what would have happened to Qantas if the Private Equity takeover went ahead...

Macquarie Airports is in for some hard times, Michael West writes; ASX: MQG; ASX: MAP

In typical private equity fashion, the airports' owners have taken out the cash and replaced it with debt.

Suprisingly they havn't made an actual profit... well the airport hasn't.

Wish I had some of the 13.5% interest payable preference shares.

 

[oz_mark]

I cannot comprehend how Sydney airport could be making a loss with all the gouging going on.

One would guess that the gouging is all part of trying to keep their head above water. Many of these debt laden organisations are also in mega financial trouble.

 

[straitman]

One would guess that the gouging is all part of trying to keep their head above water. Many of these debt laden organisations are also in mega financial trouble.

Personally I have no sympathy for Macquarie Airports/Macquarie Bank and their gouging business methods :!:

 

[NM]

I suspect the loss is directly attributable to "and a blow-out in the interest bill on its $8.1 billion of debt". While they may have a seemingly endless revenue chain, most of it is going to service the huge debt. I expect this debt is owed to one major financier (which bank? no, not that which bank), so while SAC may appear to be making a loss and hence justify increasing the gouging, I expect the owning company is making a fortune on inflated interest payments .

 

[straitman]

I suspect the loss is directly attributable to "and a blow-out in the interest bill on its $8.1 billion of debt". While they may have a seemingly endless revenue chain, most of it is going to service the huge debt. I expect this debt is owed to one major financier (which bank? no, not that which bank), so while SAC may appear to be making a loss and hence justify increasing the gouging, I expect the owning company is making a fortune on inflated interest payments .

Well put NM.

I couldn't have said it better myself.

 

[oz_mark]

I suspect the loss is directly attributable to "and a blow-out in the interest bill on its $8.1 billion of debt". While they may have a seemingly endless revenue chain, most of it is going to service the huge debt. I expect this debt is owed to one major financier (which bank? no, not that which bank), so while SAC may appear to be making a loss and hence justify increasing the gouging, I expect the owning company is making a fortune on inflated interest payments .

The owning company is making a fortune. Not only that, the owning company being a bank has a government guarantee behind it, and is no doubt using that to maximum advantage in getting cheapish funding

 

[codash1099]

I suspect the loss is directly attributable to "and a blow-out in the interest bill on its $8.1 billion of debt". While they may have a seemingly endless revenue chain, most of it is going to service the huge debt. I expect this debt is owed to one major financier (which bank? no, not that which bank), so while SAC may appear to be making a loss and hence justify increasing the gouging, I expect the owning company is making a fortune on inflated interest payments .

Why would their interest bill "blow out" in a time of falling rates? Has the debt level increased over the year and if so why?

I suspect, cynic that I am, that many companies are taking advantage of the generally negative climate to do some hefty write downs. After all, the market is attuned to losses and can't punish you much more than it already has. Then, when times improve, they can magically write some of this back and become the darlings of the market as their profits skyrocket.

 

[JohnK]

I suggest it's something like what would have happened to Qantas if the Private Equity takeover went ahead...

Greed again! And in the mean time SYD airport and more importantly the users, merchants and passengers, suffer for it.

When are we going to learn from our mistakes?

 

[oz_mark]

Why would their interest bill "blow out" in a time of falling rates? Has the debt level increased over the year and if so why?

Perhaps their debt structure is such that they don't have much ability to take advantage of lowering rates. A big chunk of their debt is essentially on a fixed rate as well.

 

[codash1099]

Perhaps their debt structure is such that they don't have much ability to take advantage of lowering rates. A big chunk of their debt is essentially on a fixed rate as well.

I allowed for that in my comment. If that was the case, the interest bill would have remained where it was, not "blown out".

 

[Nigelinoz]

$146M loss? good thing their not running an airline,otherwise they might have to park some aircraft.:!::mrgreen: