State-owned airports operator Airports Company South Africa (ACSA) has posted a profit after tax of R1.1-billion for the financial year ended March 31, up from the profit of R472-million reported for the prior financial year.

Its revenue increased by 12.5% to R7.9-billion, while its earnings before interest, taxes, depreciation and amortisation (Ebitda) increased to R2.9-billion, from R2.7-billion in the prior year.

The company's Ebitda margin, however, declined to 37% from 40% in the previous financial year, as costs increased more than revenue, said ACSA CFO Luzuko Mbotya during a presentation of the company’s results on August 25.

Operating expenditure increased by 19.2% to R4.9-billion, up from R4.2-billion in the preceding financial year. Employee costs increased by 31% to R2-billion, up from 1.57-billion, mainly owing to in-sourcing of various service functions.

ACSA's airports handled 230 000 landings in the financial year under review, reaching 92% of pre-Covid-19 levels, ACSA CEO Mpumi Mpofu said.

Cape Town surpassed pre-pandemic volumes by 12 percentage points, at 112%, and OR Tambo International Airport is at 95% of pre-Covid-19 levels.

Further, aeronautical revenue increased by 13% to R4-billion and non-aeronautical revenue increased by 12% to R3.83-billion, which now accounts for 49% of total revenue.

Additionally, capital expenditure (capex) increased to R861-million for the year under review, from R568-million in the prior financial year.

Capex had been focused on maintenance, refurbishment and rehabilitation of airport infrastructure, with repairs and rehabilitation accounting for R477-million of the total capex for the year under review.

The company also spent R152-million on technology to improve its efficiency.

“We exceeded the capex target of R727-million for the year and, by steadily increasing our capex, we are demonstrating that our systems and our people are positioned to manage a higher capex trajectory,” Mpofu said.

Additionally, ACSA has reduced its debt-to-equity gearing to 8% in the 2024/25 financial year, down from 17% in the preceding financial year.

“This is deliberate as we want to give ourselves sufficient headroom to go to market to raise more debt to fund our R21.7-billion capex programme,” Mbotya said.

The company aimed to triple its capex in the current financial year to R2.3-billion, said Mpofu.

“The operational challenges during the year under review were significant. They taught us valuable lessons to focus on preventive maintenance and avoid service disruptions for the airlines and passengers.

“We will achieve this through continuous improvement, targeted infrastructure investment and enhanced operational readiness and customer experience,” Mpofu said.

A significant portion of capex for the current financial year was assigned to refurbishment and rehabilitation and the company was not looking at adding more capacity yet as its infrastructure needed to be brought back up to international standards, she said.

Capex would ramp up in the 2025/26 financial year, but the focus was to get airports to the standards they ought to be, said Mbotya.

“Asset renewal and the modernisation 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.”

The company forecast that it would invest more than R2-billion in refurbishment and rehabilitation during the current financial year, up from R477-million in the 2024/25 financial year.

Of the 220 projects in its outlook for the 2025/26 financial year, 151 will be focused on refurbishment and rehabilitation.

“The 2025/26 financial year will be a year of consolidation and resilience, driven by the strengthening of airport infrastructure through refurbishment, embedding efficiency via technology, and ensuring compliance, while laying the groundwork for future capacity expansion,” said Mpofu.

NEW PROJECTS
ACSA had allocated R21.7-billion for infrastructure development and key capital projects between 2023 to 2032. This plan had been approved by the Department of Transport.

“One of the projects is to develop the Midfield cargo terminal at OR Tambo International Airport. Our team has started with initial work on the Midfield cargo terminal,” Mpofu said.

At Cape Town International Airport, ACSA planned to extend the domestic departure lounge and gates in an estimated R388-million project.

It also planned to expand the domestic arrivals terminal and realign the main runway in an estimated R1-billion project, which would increase capacity and improve efficiency of the airport, she said.

Further, ACSA plans to expand its energy demand management systems and solar PV solutions at OR Tambo, King Shaka and Cape Town international airports.

“We have spent more than R1.5-billion of the R21.7-billion allocated towards capital programmes, and this continued investment is expected to support growth, competitiveness, and overall user experience,” Mpofu said.