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Sunday, December 2, 2007

AoT profits plummet 90%

Airports of Thailand Plc (AoT) saw its net profit for the financial year to Sept 30 nosedive 90% year-on-year to 1.09 billion baht, the lowest in five years, due mainly to the negative effects of Suvarnabhumi Airport.


The 70% state-owned airport monopoly blamed the poor performance on a huge increase in depreciation costs, a jump in interest payments, and unrecognised concession fees from the duty-free operator King Power.


''These three items, costing AoT more than 11 billion baht together, are largely key contributors (to the fall in profit),'' AoT senior executive vice-president Kulya Pakakrong said yesterday.


Depreciation and amortisation in the period from October 2006 to September 2007 shot up 454.23% to 6.35 billion baht, as expenses related to Suvarnabhumi started to appear on the balance sheets.


Bangkok's new international airport opened on Sept 28, 2006, at the very end of AoT's last financial year.


An interest expense of 2.39 billion baht was paid in the past year for loans borrowed for the construction of the airport and the Suvarnabhumi Airport Hotel. Such items were recognised as assets during the construction period and are now regarded as expenditures. Lack of recognition of revenues from King Power caused AoT's concession revenue to drop 50.97% to 2.09 billion baht.


The revenues, amounting to about three billion baht a year, are the subject of continuing litigation between AoT and the duty-free and commercial space operator for breach of contract.


AoT said its operating revenues in the year rose 20.08% to 19.5 billion baht, boosted by a 28.37% rise in aeronautical revenues to 2.9 billion baht. The increase resulted partly from air traffic growth and from the increase in passenger service fees (airport taxes), landing and parking charges during the year.


But operating expenses rose 91% to 17.99 billion baht, mainly due to the commercial operational start-up of Suvarnabhumi, including 454 million baht for repairs and maintenance of the new airport.


The stronger baht also reduced AoT's foreign-exchange gain in the year to 2.8 billion baht from 4.19 billion a year earlier.


Mrs Kulya said that the results should not come as a shock as they were expected by institutional investors and analysts who were aware of the difficulties at the 155-billion-baht airport.


AOT shares closed yesterday on the Stock Exchange of Thailand at 57 baht, down 50 satang, in trade worth 62.15 million baht.

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