Bank loans fully repaid, CAM gets ready for new development
During the construction and initial operation of the Macau International Airport, CAM’s share capital was insufficient to cope with the huge demand for investment, and in order to put the airport in operation it became necessary to secure loans from the shareholders as well as external financiers, including the MOP 1.947 billion bank loans that have just been repaid through the issuance of new shares.
With the long-time support by the Macao SAR Government and the other shareholders to the development of the airport as well as the efforts of the management team, the operating performance of CAM has gradually been improving, and the company’s earnings before interest, taxes and amortization (EBITA) steadily growing, supplying sufficient funds for the airport’s daily operations and necessary equipment upgrades. As a result, CAM did not require capital injection by shareholders in the decade after 2001.
Since 2002, CAM has been able to operate the airport and invest in infrastructure on its operating cash flow. Having confronted the challenges posed by SARS in 2003, by cross-strait direct flights in 2008 and by the financial tsunami in 2009, the company’s performance keeps changing for the better. CAM has been able to make profits before the deduction of loan interest and non-cash depreciation expenses, and after restructuring the capital and repaying the loans deriving from the early history of the airport, the actual operating performance is expected to be better reflected. The issuance of ten-year non-voting preference shares redeemable without premium has taken account of the interests of all the shareholders and can effectively improve the company’s overall financial performance and corporate value, reinforcing the company’s position to provide residents and visitors with quality airport service as part of a macro-transportation network and to help build Macao into a World Tourism and Leisure Centre in line with the policy of the Macao SAR Government. It facilitates gradual implementation of the Macau International Airport Master Plan. It creates more favourable conditions for deeper cooperation in route development among CAM, airlines and the other business partners, and for CAM’s effort to further diversify the airport’s businesses, which aims to see an expansion of business aviation while maintaining adequate development in legacy and low-cost carriers markets.
CAM has been working closely with the Government and the Civil Aviation Authority. In addition to carrying out infrastructure constructions and equipment upgrades according to the airport’s actual development needs, CAM has been implementing incentive policies for airliness, and proactively expanding and optimizing Sea/Land-Air Express Link transportation services to facilitate passengers from the Pearl River Delta to use the Macau International Airport to travel to other cities. Moreover, “service ambassadors” have been deployed at the airport to provide information and assistance to passengers in need; new information counters are being planned, and the existing ones renovated. In view of the upcoming expiry of various sub-concession contracts next year for services such as ground handling, airport business aviation centre and others, CAM has been strategically planning for their future business models most suitable for local conditions and actual needs, taking into consideration potential changes and challenges that may be met.
In 2011, CAM successfully decreased loss to MOP15.12 million. It is estimated that the operating performance will continue to improve if there is no significant changes in the external economic conditions. Furthermore, CAM will continue to study on feasible solutions to the remaining loans lent by shareholders.
Source: Macau International Airport
