Monhla Hlahla is far from having had her best year. Airports Company South Africa (ACSA), of which she has been MD since 2001, has fallen victim to the pervasive economic tempest shaking the globe. But, instead of sitting back, awaiting the turbulence to subside, the firm has turned its attention on what Hlahla dubs "the low-hanging fruit" and priority areas while putting less-urgent projects, valued at R5,1bn, on hold for now.
The company is set to sell its property in Durban, for a yet-to-be-determined price, and may have to pass the dividend this year. As it stands, gearing - or the level of indebtedness - has risen to 58% versus last year's 44%. Net earnings for the year plunged 43,7% to R444m.
Monhla Hlahla
Over its 16-year history, ACSA has become a respected firm that runs SA's network of 10 airports including Africa's largest - OR Tambo International Airport. With 33m passengers using its network of airports last year alone, it commands a market share of a staggering 98% of commercial air traffic in SA.
After years of steady growth in air traffic, which yielded tidy earnings, the airline sector is on a reverse mode - thanks to the rough trading climate. Though conceding to the wobbling economy's effect on its bottom line, Hlahla relishes the expected business from the 2010 soccer World Cup, which will kick off in the next 10 months.
In addition, the firm is a 10% shareholder in the consortium modernising Mumbai International Airport in India. It has already committed R70m and may need to invest a further R160m over the next four years. "Our strategy is to invest in airports where there's potential for strong organic growth," says financial director Priscillah Mabelane. "There's huge potential to unlock value in India." In terms of this deal, the firm and its partners will transform the existing airport into a state-of-the-art facility and operate it for 30 years. When completed, its capacity will sit at 40m passengers a year.
Locally, the construction of Durban's state-of-the-art new international airport at La Mercy is on track. It will replace the existing Durban International Airport and boast a capacity of 7,5m passengers a year.
Last year the number of departing passengers, from which the company levies service charges, fell 7,7% to almost 17m with aircraft landings decreasing 3,8%. Despite this, the company posted a 13% rise in revenues to R3,2bn for the financial year under review.
WHAT IT MEANS
 Posted a 13% rise in revenues to R3,2bn
Investing in airports that show potential
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She ascribes the growth to the nonaeronautical portion, which rose 20% to R1,7bn. Its revenue contributes more than half the total income and comes from unregulated businesses such as retail, car rental, parking and advertising on the airport premises. Core retail swelled 29% to R562m, with property growing by 28% to R476m. Car rental, however, crept a marginal 1,5% to R128m, affected by decline in air travel. Interestingly, parking advanced 5% to R305m. Still, the firm wants to bolster this segment, she says.
The only real downside came from the advertising business, which fell 1,5% to end the financial year at R128m. This stems from "the reduction of advertising space due to the construction" under way at different airports, says Mabelane.
Transport deputy minister Jeremy Cronin said at the company's financial results announcement earlier this month, "very few private companies can claim such success in these tough times".
