By Mike Cherney

SYDNEY--Australia's biggest airport, Sydney Airport, recorded a loss in the first half of 2020 and announced a large equity raise to shore up the balance sheet amid a steep drop in passenger traffic due to the coronavirus pandemic.

The airport said its net loss attributable to security holders was 52 million Australian dollars (US$37 million) in the six months through June, compared with a net profit of A$200 million in the prior period. Earnings before interest, tax, depreciation and amortization, or Ebitda, was A$300 million, a decline of 35%.

The airport said it didn't expect to declare a distribution for 2020.

The equity raise, expected at A$2 billion, is aimed at reducing the airport's debt, increasing liquidity and will help to maintain a strong investment-grade credit rating. Eligible securityholders will get one new security per 5.15 securities held at a price of A$4.56 each, a discount of 13%, the airport said.

Looking ahead, the airport said it's unclear how long travel restrictions aimed at stopping the spread of the virus will continue. Sydney Airport said it aims to cut operating costs by 35% and wouldn't be able to extend a staff job guarantee beyond Sept. 30. Capital expenditure is also expected to be further reduced.

Total passenger traffic in the first half was 9.4 million, a decline of 57%. In the June quarter, however, total passenger traffic was just 400,000, a decline of 97% on the prior corresponding period.

Total revenue in the first half fell by 36% to A$511 million. Aeronautical revenue fell 58%, car parking and ground transport revenue fell 51%, retail revenue fell 44% and property and car rental revenue fell 31%.

Sydney Airport also said the first-half result reflected a A$41 million doubtful debt provision, rent abatements and deferrals of A$59 million, and impairment charges on capital projects of A$22 million. 



  Write to Mike Cherney at mike.cherney@wsj.com