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Thu 23 Aug 2007 09:39 AM

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Auckland airport profit drops 11%

New Zealand's airport, subject of bid for control from Dubai, sees full-year income hit by higher staff payouts.

New Zealand's Auckland International Airport, subject of a $1.8 billion bid for control by a Dubai company, reported a 10.9% fall in full-year net profit on Thursday due to higher staff payouts.

The airport, New Zealand's main international gateway, said it expected growth in both revenue and earnings of 7% in the year ahead.

It made a net profit of NZ$92 million ($64.4 million) in the year ended June 30, down from NZ$103.2 million a year ago, and in line with its forecast of NZ$91 million to NZ$92 million. The decline came as a rise in its share price meant it had to pay more for staff incentive schemes.

"The outlook for the company remains positive, with passenger growth rates improving, major airline customers undertaking significant fleet expansions and upgrades, and improved airport services," chairman John Maasland said.

State-backed Dubai Aerospace Enterprise (DAE) has offered NZ$2.6 billion for a controlling stake in the airport. The deal, to be voted on in November, is conditional on 75% shareholder acceptance and government clearance.

The offer for a stake of between 51% to 60%, is equivalent to NZ$3.80 a share. It consists of NZ$2.34 in cash and a share in a new airport company with a loan note attached, and a 7 cents per share special dividend.

The proposal, which has board backing, has met with political and public opposition.

Shares in Auckland airport, which is about 23% owned by two Auckland local councils, closed at NZ$3.20 on Wednesday. It has gained 47% so far this year, compared with a flat performance for the benchmark NZSX-50 index.

The two councils have yet to declare whether they will back the deal.

The airport operator said it would pay an unchanged ordinary dividend of 4.45 cents a share, rising by 2.55 cents to 7 cents a share if the Dubai offer was successful.

International passenger numbers were up 2.6% and domestic passengers rose 2.1%, with total passengers up 2.4% to 12.4 million.

Revenue increased 5.3% to NZ$321.9 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) were up 1.1% to NZ$242.8 million.

Auckland Airport handles around 70% of New Zealand's international arrivals and departures.

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