The FINANCIAL -- The Greater Toronto Airports Authority on August 4 reported its financial and operating results for the three- and six-month periods ended June 30, 2016.
Passenger volumes grew by 5.9 per cent during the first half of 2016 as compared to the first half of 2015, reflecting both the economic strength of the Greater Toronto Region, and the role of Toronto Pearson International Airport as Canada's largest airport and North America's second busiest airport in terms of international passengers.
"The continued growth of passenger numbers in the first half of the year reinforces Toronto Pearson's position as one of the most important airports in North America," said Howard Eng, President and CEO of the GTAA. "Our investments over the years are paying off as we serve millions of passengers each month, connecting Toronto with the world. We are encouraged to see an increase in non-aeronautical revenue, which is supported by our ever-increasing retail offerings in both passenger terminals."
A total of 20.8 million passengers travelled through Toronto Pearson International Airport in the first six months of 2016. During the six-month period ended June 30, 2016, passenger activity in the international sector increased by 739,000 passengers reflecting 6 per cent growth and the domestic sector increased by 423,000 passengers reflecting 5.8 per cent growth over the same period in 2015. During the three-month period ended June 30, 2016, 10.9 million passengers travelled through the Airport, representing an increase of 6.1 per cent, as compared to the same period in 2015. Toronto Pearson welcomed two new air carriers during the first six months of 2016 - Brussels Airlines, serving North Africa; and discount carrier WOW Air, serving Iceland.
The two-year collaborative Security in Advance project, which provides CATSA security clearance prior to reaching U.S. CBP ("Customs and Border Protection"), opened for operations in the first quarter of 2016 in Terminal 3 and the second quarter of 2016 in Terminal 1. This project was developed and implemented to meet new U.S. CBP regulatory requirements and improve passenger flow for U.S.-bound passengers using the preclearance process. Toronto Pearson is the fourth largest U.S. CBP port of entry by air to the United States, according to GTAA.
The Terminal 3 area known as Node C officially opened on June 28, 2016 with 50,398 square feet of building enhancements and retail improvements, including new post-security space for duty-free shopping, food and beverage, specialty retail, and newsstands.
For the three- and six-month periods ended June 30, 2016, the GTAA reported total revenues of $314.6 million and $618.2 million, representing increases of 7.7 per cent and 7 per cent from the same periods in 2015, respectively. The continued growth in revenues was a reflection of continued passenger growth; revenue generated by the Deicing Operation which was in-sourced by the GTAA in July 2015; and increases in non-aeronautical revenues. During the first six months of 2016, the GTAA's non-aeronautical revenues, excluding deicing revenues, increased 6.2 per cent compared to the same period last year. This was due to the opening of 25 new retail stores, restaurant, and beverage establishments in the last 12 months and increases in parking and ground transportation.
Total operating expenses reported during the three- and six-month periods ended June 30, 2016 for the GTAA were $207.0 million and $420.3 million, representing increases of $27.7 million and $45.1 million from the same periods in 2015, respectively. During the six months ended June 30, 2016, the GTAA incurred costs related to in-sourcing the Deicing Operations and invested in initiatives to improve the passenger experience.
Earnings before interest and financing costs during the three- and six-month periods ended June 30, 2016 were $107.6 million and $197.9 million, representing decreases of 4.7 per cent and 2.2 per cent from the same periods in 2015, respectively. Excluding the 2015 one-time ground rent reduction, adjusted earnings before interest and financing costs increased 4.5 per cent and 2.9 per cent for the three- and six-month periods ended June 30, 2016, from the same periods in 2015, respectively. The GTAA recorded net income of $23 million for the second quarter and $26.9 million for the first half of 2016, compared to $22.1 million and $20.9 million in the comparable 2015 periods, respectively.