€70m discrepancy in valuation of airport

SHANNON Airport has a value of €35 million according to a document that has been filed with the Companies Office.

 

It is in stark contrast to the value of €105.5 million placed on it in the Dublin Airport Authority’s annual report for 2012, published some weeks ago. According to DAA sources, that value represented investments made in Shannon, minus depreciation.

According to the document filed with the Companies Office by the Shannon Airport Authority, following the separation from the Dublin Airport Authority it is also taking on debts and liabilities of €13,853,000. Some reports this week stated the DAA was actually taking on these debts, but that is not the case. The liabilities include mortgages on properties acquired by the airport.

The €35 million valuation seems rather low considering that around €70 million was invested in Shannon’s terminal and in putting in place US Customs and Border Protection pre-clearance facilities within the last 15 years.

According to the document the value of Shannon’s terminal complexes is €9.86 million, while the land and airfields is valued at just shy of €15 million. It held equipment and machinery valued at a little over €7 million while it had cash on deposit of €6.9 million. Shannon also owns other properties valued at €5.46 million.

The transfer was made through the transfer of one ordinary share, nominally valued at €1, to the Minister for Public Expenditure and Reform Brendan Howlin.

The separation of Shannon from the DAA also resulted in the Clare airport losing any claim to the ultra-lucrative Aer Rianta International. In 2012 ARI’s operations outside of Ireland made profits of €27.4 million, following profits of €31.8 million the previous year.

The separation of Shannon was envisaged in the State Airports Act of 2004 but after the economy turned it was put back continuously, until finally being announced by Transport Minister Leo Varadkar in 2012. It went ahead at the turn of the year.

The airport now faces the challenge of becoming viable in its own right. It is attempting to recover after years of declining passenger numbers, which saw the 2012 figure reach just 1.4 million, the lowest since 1988.

However there have been some positive developments since the separation, with a number of new routes announced, including two transatlantic ones, to Philadelphia and Chicago.