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A-G Receives $45m Dividend From AFL

A-G Receives $45m Dividend From AFL
From left: Airports Fiji Limited board members Geoffrey Shaw, Executive chairman Faiz Khan, Ratu Wiliame Katonivere and Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum on September 27, 2017. Photo: DEPTFO News
September 28
12:23 2017

Airports Fiji Limited has paid out an unprecedented $45 million dividend to the Fijian Government.

The highest by any state owned enterprise.

Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum, yesterday received the highest ever dividend paid to Government by AFL.

He received the cheque on behalf of Government at the departure area of Nadi International Airport.

It has surpassed the $30 million dividend declared last year.

The implementation of the Nadi Airport Modernisation Act has been hailed as one of the major influences in AFL’s good financial position.

Mr Sayed-Khaiyum said this came about through the removal of price control for renting a space at the airport some years ago.

He also highlighted AFL’s latest annual report showed revenue received by AFL was $21.6m from land and parking fees, $21.9m from air navigation charges and $30.1m concessions from rental.

Nadi Airport  Modernisation Decree

Mr Sayed-Khaiyum said Government put in place a Nadi Airport Modernisation Decree which eventually became an Act that removed price control in as far as tenancy at the airport was concerned.

He said to rent space at a shop at Nadi Airport, which was prime real estate, at that time was a lot cheaper to rent than to rent a space at downtown Namaka and this was completely problematic.

“If you go anywhere in the world, the airport is premium rental, because they have a captive audience.”

Government’s vision for AFL

He said when the law was put in place, Government had a vision that AFL would one day be able to stand on its own two feet.

“With your ability to have that level of revenue coming from concessions, you were able to build re-construct this new airport for $130m without having to borrow a cent or a guarantee from Government.”

He said some state enterprises still approached Government today to guarantee loans.

AFL executive chairman Faiz Khan said in 2016, AFL made a net profit before tax of $65.86 million.

“The dividends declared are sustainable.”

Mr Khan said the dividend payout was based on the performance of AFL, the strength of the company’s financial position and on its balance sheets.

“It is important to emphasise and underscore that dividends are not declared from profitability per sale.

“If you look at the forecasted EBITDA (earnings before interest, taxes, depreciation, and amortization) of AFL for 2017, it is about $100 million.”

Mr Khan said AFL’s borrowing level, despite the despite the significant structure upgrades at Nadi International Airport, was still “very low.”

“Our (AFL’s) borrowing level today is around $82 million compared to an EBITDA of $100 million.

“Generally speaking, when a company has a good balance sheet and continuous to generate money like AFL then we can borrow up to three and a half times to four of the EBITDA.

“We have also successfully built infrastructure that provides us good value and enhances our abilities to service excellence for our customers.

“We believe that a good spend on infrastructure is an asset whilst poor spending results in liabilities.”

Mr Khan acknowledged the work put in by AFL workers and said the profit could not have been achieved without them.

“We believe in teamwork and strive to better ourselves.

“Up to five years ago, AFL used to declare $1 million dividend annually.

“Today we stand to declare this unprecedented dividend and is quite an achievement.”

He said this was also not possible if it were not for guidance and backing of Government.

Mr Khan praised Attorney-General and Minister for Economy for his personal commitment and attachment to the airport during its re-construction stage and its theming.

“He challenges all of us to strive and improve every time he visits us.

“Our service standards, the cleanliness of the terminal, the success of infrastructure delivery are driven by such vision that we help implement. Please keep challenging us.”

AFL workers acknowledged

Mr Sayed-Khaiyum acknowledged the work put in by the workers and AFL Executive chairman Faiz Khan and the board members in re-construction of the airport terminal.

”You’d be surprised how much of an indelible mark an airport leaves on everybody’s mind.

“The moment you travel to any country by air, the first thing you see is the airport, that actually creates the impression of a country for you.

“For those who have been travelling for over 30 years, when they walk out and see this, it completely changes their perspective on Fiji.”

Mr Sayed-Khaiyum said the new look airport had set a new standard altogether.

“People should understand how important  a pivotal role an airport plays.

“Faiz (Faiz Khan) has been instrumental in the vision that we had and its practical implementation. Governments can have visions, policies and give money but we need people to implement that.”

He reiterated how the Government reforms within the civil service had revealed the lack of implementation of certain policies by senior officials because of different reason.

Keep the Nadi International Airport clean

Mr Sayed-Khaiyum yesterday made a passionate request to workers of Airports Fiji Limited – “please help keep the airport clean.”

Speaking after receiving the $45 million dividend payment by AFL to Government, Mr Sayed-Khaiyum told the workers they had one big asset and that was the airport.

“In Fiji, traditionally, we are good at building things but not good at looking after it.

“We have to look after the asset.”

“You have to ensure that your airport is clean.

“You need to have pride in your asset. This structure gives you that profitability and also improves your PMS (Performance Merit System).

“Please make sure the place is clean and you stick to the rules.”

“If you let the standard drop, we will go back into the old ways of doing things.”

Mr Sayed-Khaiyum said Fiji needed to attract tourists to the country and one way of doing that is having a clean airport.

Feedback:  charles.chambers@fijisun.com.fj

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