ARI Reports International Retail Profits Up 17% In 2016
23 May 2017
ARI’s international retail operations posted a 17% increase in profits in 2016 according to daa’s Annual Report, which was published today.
This rise was helped by sales growth across the ARI portfolio, a strong trading performance in Cyprus, and the first full year of trading at ARI’s operations at Auckland International Airport in New Zealand.
Overall, ARI Group’s international businesses performed well in 2016, with profit after tax increasing by 11% to €24 million for the year. This 11% increase from our operations and joint ventures outside Ireland also includes ARI’s share of profits from our 20% stake in Dusseldorf Airport.
In Ireland total sales at The Loop, Dublin and Cork airports in 2016, including retail and food and beverage sales by concessionaires, amounted to €302 million. This marked an increase of 11% on 2015 buoyed by continued growth in passenger volumes. Sales at ARI’s directly-operated stores in Ireland increased by 10% in the same period.
The daa Annual Report does not provide separate profit figures for ARI’s operations in Ireland, which are incorporated in the overall performance of the Group.
ARI’s retail business in Cyprus (CTC- ARI) – at Larnaca and Paphos airports – recorded an improved sales performance driven by an increase in Russian passengers to the island.
ARI’s venture at Delhi International Airport enjoyed another year of strong sales growth with revenues exceeding US$146 million in 2016. Operations in Canada and Barbados also saw sales grow in 2016 whilst the first full year of trading of duty free operations in New Zealand performed in line with expectations. ARI’s operations in the Middle East continued to perform well despite ongoing political instability in the region and hand baggage restrictions to certain countries.
“I’m encouraged by the group’s overall performance in 2016 in both our home and overseas markets,” said ARI CEO Jack MacGowan. “We demonstrated great resilience in driving continued profit growth given the number of external challenges. This was underpinned by a clear focus on our strategic goals to improve profitability and expand our retail estate by winning and seamlessly implementing new contracts.”
In early 2016, ARI successfully retained the main concession at Muscat International Airport for the next 10 years with the new contract commencing in late 2017 in the airport’s new terminal building. In addition, ARI also won the contract to operate a number of specialty stores at the airport.
In partnership with a local company, ARI also won the tender to operate the duty paid concession in Terminal 5 at King Khaled International Airport in Riyadh, Saudi Arabia. The contract is for seven years and operations are expected to begin later this year.
In Indonesia, ARI’s local partner was chosen as the preferred bidder to operate duty free shops at the new Terminal 3 at Soekarno-Hatta International Airport in Jakarta. Subject to satisfactory final contractual negotiations and due diligence, ARI may take a stake in this business.
ARI continued to be recognised internationally for its retail excellence, winning a number of major awards during the year. ARI North America (ARINA) won Best Canadian Airport Duty Free Company at the 2016 Frontier Duty Free Association Gold Standards Awards while closer to home, ARI Ireland won the Moodie Davitt Dreamstore 2016 award for the Best Fragrance and Cosmetics travel retail store globally for its Terminal 1 outlet at Dublin Airport.
MacGowan added, “Retaining the key Muscat Duty Free contract alongside our success in acquiring the duty paid concession in Terminal 5 at King Khaled International Airport in Riyadh strengthens our position as the leading multi-location retailer in the Middle East. We are also making excellent progress on our ambitious plans for the P&C, sunglasses and fashion jewellery outlets at Abu Dhabi International Airport’s new Midfield Terminal”
“I was also delighted by the recognition of our industry peers when we received the Moodie Davitt Dreamstore 2016 award for T1, Dublin Airport and the Best Canadian Airport Duty Free Company award. Winning two such prestigious accolades once again reinforces the success of our customer centric, tailor made approach in consistently delivering great shopping experiences.”
Passenger numbers at Dusseldorf Airport, in which ARI holds a 20% stake on behalf of the Group, increased by almost 5% to 23.5 million last year. ARI’s shareholding in Dusseldorf Airport continued to make a positive profit and cash contribution to ARI.