Sydney Airport Holdings Ltd (ASX: SYD) released its full-year results this morning, reporting a 6% rise in pre-tax earnings which came on the back of $1.164 billion in revenue, a 4.3% jump compared to last year.
The stock fell 4.6% following the earnings release to trade at $4.94.
So What: The market's negative reaction could partially be explained by the announcement that Sydney Airport's long-serving chairman, Max Moore-Wilton, will step-down from his role in May.
Aside from that, the earnings results were overall quite positive. For the year ended 31 December 2014, Sydney Airport reported net profit as being $59.1 million, which the company said was not comparable to the year-ago period due to changes to the company's structure.
However, given the capital-intensive nature of Sydney Airport, as well as the company's significant debt load and interest repayments, EBITDA (earnings before interest, tax, depreciation and amortisation) provides a better measure of the company's business.
EBITDA rose by 6.1% to $948.3 million, which was driven by passenger growth of 1.7% and 2.8% growth in international passengers. A 7.1% decrease in operating expenses to $215.3 million also provided a boost to overall earnings, while strong revenue growth was recorded across all business lines, including a 4.9% lift in aeronautical revenues to $486.8 million, and a 5.6% lift in retail revenue to $255.2 million.
Australia's largest airport will pay its shareholders a total of 23.5 cents in dividends for the year. In line with its focus on growing shareholder distributions, it said it expects to increase that figure to 25 cents in 2015, which would put the stock on an unfranked 5.1% dividend yield.
Now What: Sydney Airport, which boasts a market capitalisation in excess of $11 billion, is one of Australia's most widely-held stocks – and for good reason. The company owns some of Australia's most critical infrastructure and with tourism from Asia set to jump, revenues and overall earnings should also continue to rise.
