Macquarie Airports Update

Submitted by Craig Strzelecki on 8 May, 2007 - 20:52

Macquarie Airports has a retained Hold broker call and a share price target of $4.21 from sharemarket analyst Citigroup Investment Research. Rome Airport has reported 1Q07 EBITDA of €51.7m, which was 5% below pcp and 2% below the analyst's estimated number of €52.8m.The decline was due to the sale of its Handling operations and reduction in night flight surcharge in 2H06. Operating costs have increased as the number of consultants advising on Aeronatical framework has risen. MAP's Attack On Operational Costs: Although total operating costs declined 8% over pcp, MAP noted a 10% lift in expenses excluding the benefit of the sale of Handling business. The analyst views the comments as a negotiation tactic to create urgency in the negotiations and potentially influence – most likely down – the valuation of Rome Airport. Given growing demand for infrastructure assets globally, the analysts do not rule out the Macquarie Bank group of shareholders (including MAP's 34% stake) to buy out a controlling stake in Rome Airport. MBL might take advantage of 'tension' between Gemina's various shareholders and its limited funding options. Although it may require some convincing on the merits of acquiring a controlling stake in an asset which has uncertain regulatory framework and a financially distressed airline as its main customer, the acquisition is likely to be accretive on valuation grounds (15x v/s MAP's 17x EV/ EBITDA). The protracted nature of negotiations between the shareholders of Rome Airport mean that Macquarie Airports (MAP) should be able to fund its share of contributions from the sale of its interest in Birmingham Airport, the refinancing of Brussels and Copenhagen airports later in the year.

Macquarie Airports Limited is listed on the Australian Stock Exchange (ASX) under stock code MAP. You can view their investor website here. MAP was listed on the ASX on 2 April, 2002. Kerrie Mather is the CEO and Max Moore-Wilton the Chairman for Macquarie Airports. MAp is listed on the Australian Stock Exchange, and their objective is to invest in a portfolio of ports. In its IPO prospectus, MAp stated its intention to acquire significant shareholdings which provide influence over the key strategic, commercial and financial decisions affecting its investments. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade MAP. Check your charts and good luck with your share trading!