...is it time to be contrarian investor on this afflicted sector?
...recall instos were calling it a buy back then during what looked like the end of the first wave
...and you can judge they are still holding, the sp has not tanked despite this,
...but why would you buy into a sector which destiny is still uncertain and probably never get back to pre-crisis levels for at least 1-2 years
Sydney Airport to raise $2b to slash debt after reporting loss Jenny WigginsInfrastructure reporter
Aug 11, 2020 – 9.08am
Sydney Airport will raise $2 billion in equity to stay liquid through the COVID-19 pandemic after reporting a $51.8 million interim loss.
The airport, which delivered the loss almost a week earlier than expected, said the consequences of COVID-19 had been "severe" and it could no longer guarantee staff their jobs beyond September.
A review to restructure the ASX-listed group is underway.
"Six months into the pandemic, there remains uncertainty as to how long it will take for aviation markets to return to pre-COVID-19 levels,” chief executive Geoff Culbert said.
The numbers of domestic passengers travelling through Sydney Airport have plunged 95 per cent in August after Melbourne went back into lockdown. Edwina Pickles
Chairman Trevor Gerber had previously said in May that Sydney Airport's crisis-testing had undergone a "scorched earth process" and company would have enough liquidity to survive until the end of 2021.
But the worsening pandemic has pushed out expectations of a revival in international travel for several years, while the Melbourne lockdown and ongoing state border closures have reversed the small rebound in domestic aviation that occurred in June-July.
Sydney Airport's domestic passenger numbers have slumped 95 per cent in August to date compared with a year earlier, deepening the 88 per cent decline that occurred in July.
Analysts at RBC Capital Markets warned in late June that the airport could come close to breaching default levels when its debt covenants were tested in December.
More than 44 million passengers passed through the airport in 2019, but in the six months to June, it had only 9.4 million passengers.
The company, which made an interim profit of $199.8 million a year earlier, will not pay dividends in 2020.
It results include a $40.9 million "doubtful debt" provision, of which more than half was owed by Virgin Australia before it went into administration.
The airport's income was also hit by forking out $52.9 million in rent relief for retail and property tenants (only one third of airport stores were open in July).
Aeronautical revenues tumbled 52 per cent to $173 million, while parking revenues fell 51 per cent to $38.1 million.
Before rent abatements, retail revenues fell 20 per cent over the half to $147.2 million, and property and car rental revenues were down 9.5 per cent to $108.9 million.
Occupancy of the airport's hotels was running at 44 per cent in the six months to June.
The airport plans to cut operating costs by one third by March 2021 and it has scrapped planned spending on some projects including bathroom upgrades.
The equity raising will slash the airport's pro forma net debt to $7.1 billion at the end of June from $9.1 billion, giving it liquidity of $4.6 billion including $1 billion of cash.
The fully renounceable offer is priced at $4.56 per share, a 15 per cent discount to the airport's closing price of $5.39 on Monday.
Sydney Airport's total revenue in the first half was $511 million, down 36 per cent.
