Airports Company South Africa (ACSA), the state-owned operator, posted a robust profit for the financial year, signaling a strong recovery in air travel. The company’s profit after tax more than doubled to R1.1 billion for the year ended March 31, up from R472 million in the previous fiscal year.
The positive result comes as passenger traffic approaches pre-pandemic levels. Landings at ACSA’s airports reached 92% of pre-Covid-19 volumes, with Cape Town International Airport exceeding its 2019 levels by 12%. OR Tambo International Airport reached 95% of its pre-pandemic volumes.
While revenue climbed by 12.5% to R7.9 billion, operating expenses surged by 19.2% to R4.9 billion. This increase in costs, particularly a 31% rise in employee expenses to R2 billion due to insourcing, caused the company’s EBITDA margin to slip to 37% from 40%.
ACSA is ramping up its capital expenditure (capex) to address a backlog of maintenance and refurbishment needs. The company’s capex increased to R861 million for the year, exceeding its target of R727 million.
“We are demonstrating that our systems and our people are positioned to manage a higher capex trajectory,” said ACSA CEO Mpumi Mpofu.
The company plans to triple its capex to R2.3 billion in the current financial year. A significant portion of this investment will focus on asset renewal and modernizing core airport infrastructure.
“Asset renewal and the modernization of core airport infrastructure will be the dominant focus, reflecting an urgent catch-up on maintenance, rehabilitation of ageing facilities and ensuring safety as well as reliability of airport operations,” said CFO Luzuko Mbotya.
To fund a planned R21.7 billion infrastructure program between 2023 and 2032, ACSA has strategically reduced its debt-to-equity gearing to 8%. The plan, approved by the Department of Transport, includes developing a new cargo terminal at OR Tambo, expanding the domestic terminals at Cape Town International, and installing solar power solutions at its major airports.