Aéroports de Montréal

Aéroports de Montréal

November 01, 2005 14:32 ET

Aeroports de Montreal Announces its Third Quarter Results: Corporation Succeeds in Reducing its Operating Costs, but Municipal Property Taxes Increase by 50%

MONTREAL, QUEBEC--(CCNMatthews - Nov. 1, 2005) - Aeroports de Montreal (ADM) today announced its consolidated financial results for the three- and nine-month periods ended September 30, 2005. These results are accompanied by data on passenger traffic and aircraft movements at Montreal-Trudeau and Montreal-Mirabel international airports.

Highlights

On September 15, ADM issued a new series of revenue bonds to raise total capital of $300 million. Net proceeds of the issue served primarily to reimburse borrowed funds from the credit facility and the balance will eventually be used to finance airport improvement programs.

EBITDA (excess of revenues over expenses before interest, income taxes and amortization) was $31.1 million for the third quarter and $80.7 million for the nine-month period, increases of $5.1 million, or 19.6%, and $7.6 million, or 10.4%, respectively, over the corresponding periods of 2004.

If not for the municipal property tax increase following the start-up of the new Montreal-Trudeau facilities, EBITDA would have been $3.0 million higher for the quarter. "The rapid escalation of our municipal taxes is unreasonable, considering the airport's status as a public service, and this remains a major, urgent issue for us," said ADM President and Chief Executive Officer James Cherry.

The Corporation continued work on its expansion and modernization program at Montreal-Pierre Elliott Trudeau International Airport during the third quarter of 2005. Work focused mainly on development of the new international arrivals public hall and on completion of the new international jetty, which opened on June 8.

The Corporation invested a total of $41.3 million during the third quarter of 2005 and $126.5 million for the nine months. Of this latter amount, $78.4 million was devoted to the Montreal-Trudeau expansion project. Sources of funds used for airport investments were cash flows from airport operations, including airport improvement fees ($16.9 million for the quarter and $45.4 million for the nine months), and long-term debt ($24.4 million for the quarter and $81.1 million for the nine months).

Financial results

The Corporation reported consolidated revenues of $66.7 million for the third quarter of 2005, an increase of $4.6 million, or 7.4 %, over the corresponding year-ago period. Cumulative revenues as at September 30, 2005, rose by $9.7 million to $190.6 million, or 5.4%, over the corresponding nine-month period of 2004. All of the main revenue categories, led by the rise in passenger traffic, contributed to this increase.

Operating costs (excluding municipal taxes) were $22.1 million for the quarter, down $1.0 million, or 4.3%, from the corresponding period of 2004. This variance is partly due to savings related to the closing of the Montreal-Mirabel terminal complex following the transfer of passenger traffic to Montreal-Trudeau in November 2004, partly offset by higher interest on long-term debt and by an increase in operating costs resulting from the start-up of new facilities at Montreal-Trudeau. Operating costs (excluding municipal taxes) for the nine-month period ended September 30, 2005, remained at the same level - $71.7 million - as at the same date in 2004.

Municipal property taxes were $9.0 million for the third quarter of 2005, up $3.0 million, or 50.0%, over the corresponding year-earlier quarter. This increase is due to Montreal-Trudeau's higher property value following the start-up of new facilities as part of the expansion and modernization program. ADM remains the most-taxed Canadian airport authority, paying up to four times more per passenger than certain other major Canadian airports. Municipal property taxes increased by 28.9% for the nine months ended September 30, 2005, to $23.2 million in 2005 from $18.0 million for the corresponding year-ago period.

Rent paid to Transport Canada totalled $4.6 million for the quarter, down $2.1 million, or 31.3%, from the same period of 2004. However, for the nine-month period, rent paid to Transport Canada increased by 1.9%, to $16.0 million for the nine months of 2005 from $15.7 million for same period a year earlier.

Like many companies, ADM considers EBITDA to be the best indicator for judging the Corporation's financial performance and its ability to meet its financial obligations. The Corporation reported EBITDA of $31.1 million for the third quarter of 2005 and $80.7 million for the nine months, representing respective increases of $5.1 million, or 19.6%, and $7.6 million, or 10.4%, over the same periods of 2004.

Amortization was $17.1 million for the quarter, up $1.1 million, or 6.9%, from the year-ago period. This increase is due to the start-up of numerous new facilities at Montreal-Trudeau, including the international arrivals complex (November 2004) and the international jetty (June 2005). Amortization decreased by 1.7% for the nine months ended September 30, 2005, to $46.3 million from $47.1 million for the same period of 2004. Results for the third quarter of 2004 took into consideration a non-recurring amortization expense of approximately $3.3 million for certain assets of the Mirabel terminal in anticipation of its closing in November of that year.

Interest on long-term bonds was $13.6 million for the third quarter of 2005, up $4.2 million, or 44.7%, from the same quarter of 2004. Interest on long-term bonds rose by $3.4 million, or 11.1%, for the nine months ended September 30, 2005, to $34.0 million from $30.6 million for the same period of last year. The difference in the amount of interest on long-term bonds for both periods this year and last is entirely attributable to the variance in the amount of capitalized interest on construction in progress and by the issue of the new series of revenue bonds.

Equity income in equity-accounted ADM Capital affiliates represent professional fees incurred as at September 30, 2005, for the submission of a brief to establish the amount of damages sustained and claimed following the expropriation notice received in late 2001 from Hungarian authorities regarding ADM's investments in these affiliates.

The Corporation reported a shortfall of revenues over expenses of $0.7 million for the third quarter of 2005, compared with an excess of revenues over expenses of $0.9 million for the same quarter of 2004. This $1.6-million variance is mainly the result of increased municipal property taxes, interest on long-term debt and amortization, all offset by the higher revenues and lower rent paid to Transport Canada. The shortfall of revenues over expenditures for the nine-month period ended September 30, 2005 was $1.7 million, compared with a shortfall of $2.1 million for the corresponding period of last year, an improvement of $0.4 million, or 19.0%.



Financial highlights:

Cumulative as at
Third quarter September 30,
2005 2005
---------------------------------------------------------------------
(in millions Variance Variance
of dollars) 2005 2004 (%) 2005 2004 (%)
---------------------------------------------------------------------
Revenues 66.7 62.1 7.4 190.6 180.9 5.4
---------------------------------------------------------------------
Operating costs
(excluding
municipal taxes) 22.1 23.1 (4.3) 71.7 71.7 -
---------------------------------------------------------------------
Municipal taxes 9.0 6.0 50.0 23.2 18.0 28.9
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Rent paid to
Transport Canada 4.6 6.7 (31.3) 16.0 15.7 1.9
---------------------------------------------------------------------
EBITDA 31.1 26.0 19.6 80.7 73.1 10.4
---------------------------------------------------------------------
Amortization 17.1 16.0 6.9 46.3 47.1 (1.7)
---------------------------------------------------------------------
Interest on
long-term bonds 13.6 9.4 44.7 34.0 30.6 11.1
---------------------------------------------------------------------
Equity income in
equity-accounted
affiliates (1.0) - - (1.0) - -
---------------------------------------------------------------------
Excess (shortfall) of
revenues over
expenses (0.7) 0.9 (177.8) (1.7) (2.1) (19.0)
---------------------------------------------------------------------
Cash flows from
operating
activities 16.9 17.1 (1.2) 45.4 45.3 0.2
---------------------------------------------------------------------


Passenger traffic

Passenger traffic at Aeroports de Montreal (now all concentrated at Montreal-Trudeau) increased by 4.1 % in the third quarter over the same period of 2004, with 3.0 million passengers handled. The largest increase was in the international sector, with traffic up 7.6%, while the transborder and domestic sectors saw increases of 3.6% and 1.7% respectively. For the nine-month period of 2005, a total of 8.4 million passengers passed through Montreal-Trudeau, up 5.7% from the corresponding period a year earlier.



Table - passenger traffic

-------------------------------------------------------------
Aeroports de Montreal
2005 2004 Variance
-------------------------------------------------------------
January 894,946 782,206 14.4%
February 852,709 821,379 3.8%
March 930,130 881,942 5.5%
-------------------------------------------------------------
1st quarter 2,677,785 2,485,527 7.7%
-------------------------------------------------------------
April 860,421 813,808 5.7%
May 866,901 836,864 3.6%
June 957,214 890,388 7.5%
-------------------------------------------------------------
2nd quarter 2,684,536 2,541,060 5.6%
-------------------------------------------------------------
July 1,042,948 1,003,084 4.0%
August 1,054,183 1,038,604 1.5%
September 951,058 886,416 7.3%
-------------------------------------------------------------
3rd quarter 3,048,189 2,928,104 4.1%
Total as at September 30 8,410,510 7,954,691 5.7%
-------------------------------------------------------------

Source: Aeroports de Montreal, preliminary figures


Aircraft movements

Overall aircraft movements at Aeroports de Montreal increased by 0.6% overall for the third quarter, but declined by 2.5% for the nine months ended September 30, 2005, compared with the corresponding 2004 periods. The number of aircraft movements at Montreal-Trudeau increased by 4.0% for the quarter and 0.7% for the nine months.



Table - aircraft movements

---------------------------------------------------------------------
3rd 3rd Variance Nine Nine Variance
quarter quarter % months months %
2005 2004 2005 2004
---------------------------------------------------------------------
Montreal-Trudeau 56,082 53,917 4.0 157,097 156,059 0.7
---------------------------------------------------------------------
Montreal-Mirabel 5,931 7,723 (23.2) 18,045 23,598 (23.5)
---------------------------------------------------------------------
Aeroports
de Montreal 62,013 61,640 0.6 175,142 179,657 (2.5)
---------------------------------------------------------------------

Source: Aeroports de Montreal, preliminary figures


Aeroports de Montreal is the local airport authority responsible for the management, operation and development of Montreal-Trudeau and Montreal-Mirabel international airports since 1992. The Corporation employs a total of some 600 persons at both airports and at head office.

Contact Information

  • Aeroports de Montreal
    Christiane Beaulieu
    Vice President, Public Affairs
    (514) 394-7304