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ARI Contributes €27 Million In Profits After Tax To Parent Company DAA In 2012

Aer Rianta International’s (ARI) operations outside Ireland contributed €27.4 million in profits after tax to its parent company, Dublin Airport Authority (DAA) in 2012, according to the DAA’s annual financial results published today (April 30).

The ARI profit figure, published in Dublin today, includes contributions from ARI’s joint venture and wholly-owned concessions located in eleven countries other than Ireland, ranging from North America through the Middle East and India, to China.

The profit figure also includes a €10.1 million dividend from Dusseldorf International Airport in Germany, where DAA, through ARI, holds a 20% shareholding.

The equivalent ARI profit contribution to DAA in 2011 amounted to €31.8 million. This  reflected the impact of certain one-off factors that year such as the disposal of ARI’s shareholding in three Russian businesses.

When these exceptional items are factored out, ARI’s profit after tax contribution to DAA from continuing business outside Ireland, increased by nearly 6% during 2012.

The profit contribution from ARI’s operations in Ireland is not disclosed separately in the DAA accounts, as this contribution is treated for regulatory purposes as DAA commercial income by Ireland’s Commission for Aviation Regulation.

The DAA accounts reveal that ARI’s sales at own-operated shops in Dublin, Cork and Shannon airports rose by an average of 1% in 2012. The average spend per passenger was also 1% higher.

“Last year represented another very solid trading performance for ARI. Retail sales at our locations outside Ireland increased by 16% during 2012 despite continued challenging conditions in some core markets,” said ARI CEO, Jack MacGowan.

“ARI’s global managed turnover, including its Irish operations, amounted to €1.1billion during the period under review, an increase of 11%. Our energies are very focused on enhancing profit margins as well as sales in all locations,” he noted.

Total retail sales at the Irish airports, including retail, and food and beverage sales by concessionaires, amounted to €221 million last year, a modest decline compared to 2011.

Shannon Airport separated from DAA on December 31, by decision of the DAA’s sole shareholder, the Government of Ireland.  ARI will continue to supply the shops at Shannon on a contract basis.

“Our direct retail operations did very well to buck the continued downward retail sales trend in Ireland generally,” Mr MacGowan said. “We also had other notable successes with the launches in Ireland of our own brand of bottled water, Plane Water, and of the theloop.ie, which now offers the largest available for purchase selection of any airport retail website in Europe.”

ARI’s joint venture interests across the Middle East performed strongly overall in 2012, despite the impact of political uncertainty in parts of the region on passenger traffic and spending.

Mr MacGowan said ARI continued to work closely with MIAL, operators of Mumbai International Airport,  in advance of the opening of the Airport’s new Terminal 2.  MIAL announced in January that a joint venture partnership involving ARI and the Indian company, Buddy Retail, had been selected by tender process as preferred candidate to operate the core duty free concession in Terminal 2.  ARI will be the lead operator in the concession, which has a term of close to eleven years from the opening of the new terminal, and incorporates a combined 5,000 sq metres of departures and arrivals retail space.

“Our joint venture at Delhi International Airport, where we are also lead operator, continues to exceed expectations and generated sales in excess of $100 million in 2012, its second full year of operation,“ Jack MacGowan added.

“India is one of the world’s fastest-growing markets for air travel and airport retail services and has been identified by ARI as a key target for focused regional growth. We are excited about the prospect of operating at the two principal international gateways to the sub-continent and about the benefits our scale will bring to suppliers and passengers, and to our airport partners in the region,” he said.

ARI commenced trading in another Asian market during 2012, when it opened duty paid shops at Kunming Changshui International Airport in south-west China.

“We continue to work with Yunan Airport Group and our suppliers to ensure we service this new market successfully and, in time, build on our presence there,” Mr MacGowan said.

ARI’s operations in Canada and Barbados had a solid trading year, with sales in Canada modestly ahead of the record C$50 million figure achieved in 2011.

The company continues to keep its exposure to certain markets under review. In this context, ARI’s trading performance at Kiev Boryspil Airport in the Ukraine remained robust during 2012 despite the ongoing migration of passengers between various terminals at the airport. In Russia, ARI continues to hold a shareholding in Aerofirst’s retail operations at Sheremetyevo Airport in Moscow. It operates supply-only contracts to outlets it previously operated directly at Moscow’s other international airports and at St Petersburg.

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