Airport operator plans 25 per cent revenue increase

The 2017 Annual General Meeting of Shareholders of the Airports Corporation of Viet Nam was held on Wednesday in HCM City.-Photo news360.vn

The corporation released this information at its annual general meeting of shareholders held on Wednesday.

The company also targets pre-tax profits of VND3.66 trillion, an increase of seven per cent over 2016, and expects to pay a dividend of nine per cent.

The corporation expects to welcome 27 million international passengers in 2017, a surge of 14 per cent year-on-year while the number of domestic passengers is projected to reach 64 million, up 12 per cent year-on-year.

The revenue target does not include income from the operation of airfields. The financial plan released at the meeting does not take into account the effect of exchange rate differences caused by ACV’s long-term and short-term borrowings, of which a large amount is in Japanese yen lent by the Japan International Cooperation Agency (JICA).

Lai Xuan Thanh, head of the Civil Aviation Authority of Viet Nam (CAAV), was elected as a member of AVC’s board of directors, replacing Nguyen Nguyen Hung, former Chairman of the Board of Directors, on his retirement.

The meeting heard that total financial costs borne by ACV was around VND10 trillion, mainly for upgrading infrastructure, including VND6 trillion on “typical” projects that will begin implementation this year.

The Prime Minister has assigned AVC to carry out a feasibility study for phase one of the Long Thanh International Airport project.

The corporation has prepared a project outline and estimated costs of the feasibility study. It will soon lauch the bidding process for selecting a consultant for the feasibility study.

The company has carried out evaluations of the architectural designs for the airport and collected feedback from experts and public in accordance with the law, the meeting heard.

ACV is waiting for the Government’s direction on selecting the architectural design to complete the project feasibility study.

Deputy Minister of Transportation Le Dinh Tho said at the meeting that land clearance for the Long Thanh airport project will be completed by the end of this year. The project is expected to star in 2019 and be completed in 2025.

According to ACV’s Board of Directors, 2016 was the first year that the corporation operated as a joint stock company. They said that with the efforts of leaders and all employees, ACV has completed its plans and even exceeded targets set out for 2016.

From April 1 to December 31, 2016, revenues earned by the parent company reached VND10.1 trillion, exceeding the planned target by 13.53 per cent. Pre-tax profits, excluding profits generated by exchange rate differences, topped VND 2.8 trillion, nearly 2.4 times higher than the business plan.

In 2016, the company also focused on upgrading its infrastructure and began operating many aviation infrastructure projects on schedule, serving growing demand in the aviation market.

ACV’s transportation capacity improved significantly and exceeded the annual plan. “Total passenger output” in 2016 reached 81 million, up 28 per cent over 2015, exceeding the annual plan by 10.19 per cent. Commodities and parcel transport reached 1.1 million tonnes, up 15 per cent year-on-year, exceeding the annual target by 2.82 per cent.

The total number of take-offs and landings was 557,000, up 24 per cent, exceeding the annual target by 7.94 per cent.

Total assets of the corporation, as of December 31, 2016, was valued at VND45.1 trillion, with short-term assets of VND20.2 trillion and long term assets totalling VND24.9 trillion. Total liabilities amounted to VND21.1 trillion, down VND 2.3 trillion from April 1, 2016, when ACV officially began operation as a joint stock company.

The corporation’s short-term debt stood at VND6.6 trillion and long-term debts at over VND14.5 trillion, most of it in Japanese yen lent by the Japan International Cooperation Agency (JICA) for the project to construct an international passenger terminal at the Tan Son Nhat International Airport and terminal T2 at the Noi Bai International Airport.

Regarding the plan to list on the HCM City Stock Exchange (HOSE), the meeting heard that the corporation officially went into operation as a joint-stock company only from April last year. As of now, its airfields were still under the State management. The State’s auditing agency proposed that the Government makes a quick decision on the management of these areas. As of now, conditions were not sufficient for the listing. Managers said ACV would promptly work on this issue and soon inform shareholders.

On stock sale negotiations with the French corporation Aeroports de Paris (ADP), the meeting heard that ACV plans to sell 20 per cent of its shares to its strategic shareholder. However, the two sides have yet to reach an agreement. Currently, ACV is waiting for the final decision from the Government for finalising the deal.

ACV will soon complete a plan to withdraw capital from two affiliates: Viet Nam Air Services Company (VASCO) and the Southern Airports Services Joint Stock Company (SASCO).