Separate information is presented in this announcement relating to both BAA Limited and BAA (SP) Limited. BAA Limited is the owner of the whole BAA business and prior to 6 October 2008 it was called Airport Development and Investment Limited. BAA (SP) Limited is the owner of BAA’s three London airports of Heathrow, Gatwick and Stansted (the ‘Designated Airports’).
Highlights
Financial
- Financial performance in line with BAA’s expectations
- BAA Limited (2)(3)
- Reported revenue up 14.5% to £2,125 million (2007: £1,856 million (restated))
- Adjusted Revenue up 14.3% to £2,590 million (2007: £2,266 million)
- Adjusted EBITDA(4) up 0.9% to £1,092 million (2007: £1,082 million)
- Adjusted Operating Profit(4) down 18.4% to £582 million (2007: £713 million)
- Operating profit of £23 million (2007: £476 million)
- Net debt of £12.1 billion(5) at 31 December 2008
- Capital investment of £1.2 billion
- Completed refinancing provides permanent long-term funding platform for the group
- Shareholders increased financial commitment with £400 million equity injection
- BAA (SP) Limited(6)
- Revenue up 16.0% to £2,292 million (2007: £1,976 million)
- Adjusted EBITDA(4) up 1.3% to £916 million (2007: £904 million)
- Adjusted Operating Profit(4) down 23.3% to £472 million (2007: £615 million)
- Operating profit of £364 million (2007: £435 million)
- Cash generated from operations of £831 million (2007: £817 million)
- Net debt of £9.4 billion (5) and Regulatory Asset Base of £12.5 billion at 31December 2008
- Capital investment of £1.0 billion
Operational
- Focus on service and investment delivering tangible customer benefits
- Independent survey shows Terminal 5 amongst best European airport facilities and recognises significant improvements in passenger satisfaction at Heathrow and Gatwick(7)
- Heathrow and Gatwick improve performance under CAA service quality schemes
- Group passenger traffic declined 2.7% to 151.4 million (2007: 155.7 million) with traffic at BAA’s three London airports declining 2.6% to 123.4 million (2007: 126.8 million)
- 3.5% growth in long haul traffic demonstrates strength of Heathrow’s hub airport status
- Robust retail activity - net retail income per passenger up 2.9% across London airports
Outlook for 2009
- Whilst expecting a challenging year, underlying profits and cash flow forecast to increase
- Reflects increases in aeronautical tariffs consistent with regulatory settlements
- Recognises that no further significant change in operating costs is required
- Supports further significant investment in airport facilities
- Despite continued impact of economic environment on passenger traffic
- Planned disposal of Gatwick progressing on schedule
- Continue to step up focus on improving service quality
Colin Matthews, Chief Executive of BAA, said: "BAA performed strongly in 2008 although its performance was affected by a drop in passengers, which reflects the general economic situation. 2009 will be a challenging year but BAA is resourced and structured to meet those challenges and continue to invest in the capital programme that is vital for the future of the business, its passengers and our airline customers."
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(1) BAA Limited was previously Airport Development and Investment Limited with the change of name occurring on 6 October 2008
(2) BAA Limited statutory accounts prepared under International Financial Reporting Standards (‘IFRS’) with Gatwick treated as a discontinued operation
(3) ‘Adjusted’ figures for BAA Limited include Gatwick’s trading results
(4) Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation and exceptional items (and certain remeasurements in the case of BAA Limited) and Adjusted Operating Profit is Adjusted EBITDA less depreciation and amortisation (excluding any exceptional depreciation items)
(5) Nominal value of debt and excludes intra-group loans and is before index-linked accretion of £42 million
(6) BAA (SP) Limited is the holding company in the financing structure for BAA’s three London airports. Its statutory accounts are prepared under UK GAAP with Gatwick treated as a continuing operation
(7) Source: Q4 2008 Airport Service Quality survey by Airports Council International."
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