Heathrow owner increases profit forecast for 2012

Heathrow owner increases profit forecast for 2012

Heathrow and Stansted owner BAA (SP) has raised its profit forecast for 2011 and said it expected “strong revenue growth” next year.

The arm, which runs the two London airports and Heathrow Express, expects adjusted EBITDA (profit before tax and other costs) for the year ending this month to be £1.128 billion, slightly above the previous forecasts.

“BAA (SP) Limited expects to deliver further strong growth in revenue and adjusted EBITDA in 2012,” the company said in an investor report published this morning.

Adjusted EBITDA is predicted to rise by 13.7% to £1.283 billion with the increasing cash flow helping to finance Heathrow's “significant” investment programme

As a result it expects to re-commence paying dividends to shareholders in 2012 for the first time since 2006 at an initial rate of £60 million per quarter.

“Payments will reflect BAA's ability to continue to access stable financial markets to finance its substantial ongoing capital investment programme at Heathrow,” the company said.

Passenger traffic is forecast to rise by 0.6% to 88.1 million in 2012, driven by Heathrow's performance where traffic is forecast to reach 70.8 million, reflecting 2012's leap year, introduction of larger aircraft and improved load factors.

“Revenue is expected to grow 9.7% to £2.516 billion, reflecting primarily increased passenger numbers and aeronautical tariffs supported by further growth in retail income per passenger,” the company said.

“Heathrow expects to spend well over £1 billion on its capital investment programme during 2012, particularly accelerating activity on construction of the new Terminal 2.

“This programme is the biggest private development in the country which will support the UK economy with thousands of high-calibre jobs as the pressure on public sector spending continues.”


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