Rental incomes increase for Sri Lanka airport operator

ECONOMYNEXT – Sri Lanka’s civil airports operator, Aviation Services (Sri Lanka) Limited (AASL), reported sharply higher income from rents and concessions last year as it seeks to earn more from its terminals.

Asset revenue, derived from property rentals and leases across airport terminal, airfield and cargo areas, grew by 38 percent in 2018 from the year before.

This was mainly owing to “stable relationships with our partners who have permitted us to develop medium to long-term rent strategies,” AASL chairman Dammika Ranatunga said in the company’s annual report.

“This approach also ensures that asset revenue will continue to be a key driver of our non-aeronautical revenue segment.”

AASL asset revenue rose to 28.7 billion rupees in 2018 from 20.7 billion rupees earned in 2017.

The revenue per passenger increased to 2,640 rupees from 2,085 rupees during the period.

However, AASL’s net profit fell 39 percent to 5.3 billion rupees in 2018 from the year before mainly because of the exchange loss of 8.1 billion rupees on foreign currency loans and
increased income tax.

“Since most of our development projects are funded through foreign loans and although borrowing denominated in foreign currencies are cheaper in commercial terms compared to those in local currency, the exposure to the risk of exchange rate fluctuation is unavoidable and is beyond our control,” Ranatunga said.

“The depreciation of the Sri Lankan rupee against the US dollar and Japanese yen increases our debt burden and would continue to affect our financial performance.”

The report said the 13 percent growth in aeronautical revenue in 2018 was driven primarily by the increase in air traffic which was seven percent higher than the previous year.

The increase in non-aeronautical revenue of 24 percent was underpinned by strong concession income, which hit a high of 7.83 billion rupees, up 39 percent from the year before.

AASL gets 18 percent of revenue from the aeronautical sector including aircraft landing and parking and overflying.

As much as 69 percent of revenue comes from the non-aeronautical sector, such as concession, embarkation and rental.
(COLOMBO, 26 August, 2019)