Ghana Airports Company swings to profit in 2013

The Ghana Airports Company Limited (GACL) says it has returned to profit on the back of improved revenues and effective cost management, having recorded a net profit of GH¢19.1 million for the year ending December, 2013.

The company’s fortunes are up from a loss of GHC¢84.2 million in 2012.

Mr. Charles Asare, acting Managing Director, GACL, who was speaking at the company’s second Annual General Meeting, in Accra, said Aeronautical revenues for 2013 rose to GH¢287,525, an increase of 37 per cent over the 2012 figure of GH¢63, 875.

This was the result of monies accrued from the Airport Passenger Service Charge (APSC), as well as favourable exchange rates.

Effective December 2013, the GACL began retention of the full amount of the APSC, in line with government policy which was passed in May 2013.

The company is negotiating with the Ghana Revenue Authority to reconcile the accounts between May and December 2013, when they continued to receive on 40 per cent.

Non Aeronautical revenue on the other hand, grew marginally by only 2.83 per cent, from the 2012 figure of GH¢ 24,369 to GH¢ 25,062 in 2013.

This minor increase was from revenue collected from car parks, which increased by GH¢0.8million and rental income, by GH¢0.3million. Royalties, however, decreased by GH¢0.5million from GH¢15 million to GH¢ 14.5 million in 2013.

Total expenses for the year ended 2013, including a depreciation of GH¢27,389, was GH¢96,196, down from a total of GH¢179, 474 (including depreciation of GH¢127, 492) in 2012.

The GACL explained the huge figure for depreciation in 2012 was due to the application of International Financial Reporting Standards (IFRS) for depreciation of its assets.

The company revalued its assets in 2012, and according to the IFRS, depreciation was determined based on the expected lifespan of the asset and how much of that lifespan was still ahead.

It, however, found that most of its assets had lasted for most of its lifespan, thus the high rate of depreciation in that year.

Mr. Asare noted that the favourable operational and financial results of the company was in line with positive growth in the aviation industry in general and Ghana in particular, adding that, the GACL believed the growth in the sector would continue and were developing appropriate strategies to address the challenges and opportunities of the industry.

In the year under review, international aircraft movement improved by 6.1 per cent to 23,437 from 22,082 in 2012. This was as a result of the operations of new entrants and increased flight frequencies by a number of existing airlines at the KIA, and in spite of the suspension of operations by some.

Domestic aircraft movements saw a faster growth of 28.9 per cent in 2013 to 18,497 from 14,352 in 2012, attributable to growing demand hinged on reliable air service and competitive values as compared to road transport.

This was evident in the increase in domestic passenger throughput by 43.3 per cent to 780,000 in 2013 from 540,000 in 2012.

There was, however, a drip in international passenger traffic by 3.3 per cent from 1.72 million in 2012 to 1.67 million in 2013.

"Europe remained the most travelled destination with market share of 33.1 per cent followed by West Africa with 23.6%. Middle East, East and Southern Africa, North America and North Africa in that order comprised the remaining 43.3 per cent," he stated.

Total uplift of freight in 2013 was 43,688 tonnes, a negative variance of 6.2 per cent as against 46,577 tonnes in 2012.

The decrease, according to Mr. Asare, was due to the general downturn in business activity across major economies, which resulted in a shift from movement of goods by air freight to sea freight, particularly, with regard to trade between Ghana and Nigeria.

Mr. Asare outlined some milestones that the GACL had achieved in the year under review, including major enhancements in airport faculties and security systems.

Some of these were installation of new check in desks at the departure hall, new baggage handling carousels, X-ray and screening equipment as well as the initiation of a CCTV installation project at the KIA, expected to be completed by end of 2014.

Others are construction of apron pavement and associated works, extension of fuel mains to provide fuel to the southern apron to improve turnaround time for aircraft, provision of ground lighting to provide apron flood light, edge light and guidance light to aircraft.

Mr. Tony Lithur, Chairman of the Board of the GACL, said the company was poised to make great strides in ensuring the achievement of the vision of making the KIA the gateway to West Africa.

"The outlook is bright as we plan to leverage on the stability of the country to attract more airlines into the KIA and also improve facilities at the KIA and regional airports, to help improve domestic transportation of people and goods for economic development," he stated.