Sydney Airport’s Share Price Up 3.4% on Midyear Performance Update
Shares in Sydney Airport Holdings Pty Ltd [ASX:SYD] haven risen in response to newly released passengers numbers and updated performance and flight updates.
At time of writing, Sydney Airport’s share price is valued at $8.19, up 3.4%.
As Australia’s largest airport, Sydney Airport is also the busiest by passenger movement, with a heavy reliance on international traffic.
‘Double-digit’ international numbers offset domestic decline
According to the release, there was a 0.3% increase in the number of domestic passengers in the last month, to 2.2 million. But the year-to-date performance growth for domestic travel has fallen 1.4% to 11.2 million.
International travel has once again fared better, driven by increased demand and double-digit growth from China, Japan, Malaysia and the US. International traffic grew by 6.3% to 1.3 million people for May. This translated to a slight increase year-to-date, with 2.1% growth to 6.9 million.
Sydney Airport also highlighted a few of their new services, including:
- A daily service to Kuala Lumpur which will commence in Mid-August this year through Malindo Air.
- Qantas’ new seasonal Sapporo service will commence mid-December through to mid-March.
Sydney Airport’s Share Price outlook
It’s an impressive turnaround on the year prior in terms of international visitor numbers for the airport, especially given recent fears of a slowdown in Chinese visitor numbers.
However, improved international numbers over the span of a month doesn’t automatically erase the problem of fewer domestic travellers, which has been spurred on by higher domestic fees and continues to be a long-term risk for the company.
The total number of passengers annually is still down 0.1% year-to-date to 18.2 million.
Looking ahead, it’s hoped that the inclusion of the two new flight services will bring in extra traffic and profit, but there’s still a way to go to address decline on a domestic level.
For Money Morning
PS: In this just released report, editor Matt Hibbard shows you his top five dividend picks in Australia. Claim your copy of the ‘Top 5 Dividend Stocks 2019’ today.