Sydney Airport : Preliminary Final Report

For personal use only

23 February 2022

ASX Market Announcements Office

Australian Securities Exchange Limited

Lodged electronically via ASX Online

Sydney Airport Limited

FY21 Appendix 4E and Preliminary Final Report

Sydney Airport Limited attaches the following documents relating to its results for the full-year ended 31 December 2021:

• Appendix 4E; and
• Preliminary Final Report.

Yours faithfully,

Rob Catterall

Head of Investor Relations

Media Enquiries: [phone]

Investor Relations Enquiries: [phone]

Authorised for release by the Boards of Directors

Sydney Airport Corporation Limited ACN 082 578 809 - The Nigel Love Building, 10 Arrivals Court, Locked Bag 5000

Sydney International Airport NSW 2020 Australia - Telephone [phone] - sydneyairport.com.au

For personal use only

Appendix 4E & Preliminary Final Report for the year ended 31 December 2021

Sydney Airport

1. Sydney Airport | Preliminary Final Report 2021

Table of contents

Appendix 4E

Preliminary Final Report

	Review of operations
	Consolidated statements of comprehensive income
	Consolidated statements of financial position
	Consolidated statements of changes in equity
onlyConsolidated statements of cash flows
use	Condensed notes to the Preliminary Final Report
General
Capital management
	1	Contributed equity and distributions
	2	Interest bearing liabilities
	3	Cash and cash equivalents
	Treasury and financial risk management
	4	Financial risk management
personalFor	5	Derivative financial instruments
6	Net finance costs
Financial results and financial position
	7	Segment reporting
	8	Earnings per share
	9	Receivables
	10 Property, plant and equipment
	11	Intangible assets
	12	Taxation
	13	Leases
	14	Provisions
	15	Sydney Gateway
	Other disclosures
	16	Subsequent events

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1

For personal use only

Appendix 4E

Results for announcement to the market

	SAL Group	SAL Group
	31 Dec 2021	31 Dec 2020	Movement	Movement
	$m	$m	$m	%
Revenue	620.6	803.7	(183.1)	(22.8)
Other income	9.4	115.7	(106.3)	(91.9)
Total revenue	630.0	919.4	(289.4)	(31.5)
(Loss) after income tax expense	(262.3)	(107.5)	(154.8)	(144.0)
(Loss) after income tax expense attributable to securityholders	(266.9)	(145.6)	(121.3)	(83.3)
	SAT1 Group	SAT1 Group
	31 Dec 2021	31 Dec 2020	Movement	Movement
	$m	$m	$m	%
Revenue	-	-	-	-
Other income	-	-	-	-
Total revenue	-	-	-	-
Profit after income tax expense	255.8	154.2	101.6	65.9
Profit after income tax expense attributable to securityholders	255.8	154.2	101.6	65.9

Distributions

During the years ended 31 December 2021 and 31 December 2020, no distributions were declared or payable by SAL or SAT1.

Distribution Reinvestment Plan (DRP)

The distribution reinvestment plan (DRP) provides stapled securityholders with a method of automatically reinvesting all or part of their distributions into stapled securities. As there were no distributions declared for the year ended 31 December 2021 and for the year ended 31 December 2020, the DRP was not in operation.

Additional Appendix 4E disclosures can be found in the Preliminary Final Report for the Year Ended 31 December 2021, lodged with the ASX on 23 February 2022.

ASX-Iisted Sydney Airport (the Group) is comprised of Sydney Airport Limited (ABN 18 165 056 360) (SAL) and Sydney Airport Trust 1 (ARSN 099 597 921) (SAT1). The Trust Company (Sydney Airport) Limited (ABN 83 115 967 087) (AFSL 301162) (TTCSAL) is the responsible entity of SAT1.

2 Sydney Airport | Preliminary Final Report 2021

Review of operations

For personal use only

for the year ended 31 December 2021

ASIC Guidance

The Preliminary Final Report has been prepared in accordance with ASX Listing Rule 4.3A and has been derived from the unaudited Annual Financial Report. In accordance with the Corporations Act 2001, the Preliminary Final Report is unaudited and contains disclosures which are extracted or derived from the Annual Financial Report for the year ended 31 December 2021. The Annual Financial Report is in the process of being audited.

Significant changes in state of affairs

COVID-19 pandemic

The COVID-19 pandemic has continued to have a severe impact on the aviation industry and airport community. Sydney Airport remains committed to keeping the airport open as an essential service, with our operational response guided by the principles to 'protect our people', and 'protect the business', whilst continuing 'to make Sydney proud every day'.

Passenger traffic through Sydney Airport, particularly international traffic, continues to be materially impacted, with international and domestic passengers down 95.5% and 74.0% respectively in 2021 when compared to the comparative period in 2019, which is prior to any impact of the COVID-19 pandemic.

The Group continues to closely monitor the impacts of the COVID-19 pandemic on passenger numbers, revenue, operating expenses, capital expenditures and interest rates. The Group continues to have significant levels of liquidity available and will be able to pay its debts as and when they become due and payable. Accordingly, the Group considers that the COVID-19 pandemic will not impact the ability of the Group to remain solvent or to continue to operate as a going concern.

Concessions and provisions on debts recognised in the full year preliminary final report are described below:

• Expected credit loss (ECL) provisions of $67.7 million (2020: $93.9 million) were recognised across debtors, where information available at this time indicates the probability that the debts owed may not be recovered. These relate to provisions for doubtful debts and rent deferred.
• A range of rental concessions continue to be provided across both the retail and property portfolios during the year ended 31 December 2021. Concessions in the form of rent abatements of $176.2 million (2020: $142.8 million) and rent deferrals of $1.7 million (2020: $8.4 million) were agreed during the period. Of the abatements, $68.0 million (2020: $52.5 million) was recognised through ECL expense. $13.9 million (2020: nil) in variable abatements was applied against revenue in line with variable lease payments and the remaining $94.3 million (2020: $90.3 million) of abatements will be recognised on a straight line basis as a reduction to revenue over the remaining lease terms, in accordance with the relevant Accounting Standard. Abatements in 2020 and 2021 that have been recognised as a reduction to revenue over the remaining lease term totalled $58.0 million (2020: $24.3 million). Of this, $30.9 million and $27.1 million relate to 2020 and 2021 abatements respectively.
• Rent deferrals provide an extension of payment terms with no impact to revenue. The Group re-assessed the expected recoverability of all deferred rents against the related receivables as at 31 December 2021. This had a favourable impact of $5.2 million (2020: $5.2 million expense), which was recognised through the Consolidated statements of comprehensive income during the year.
• The Group assessed the recoverability of its debtors and $4.9 million (2020: $36.2 million) was recognised through the Consolidated statements of comprehensive income during the year in relation to the provision for doubtful debts.

The SAL Group recognised $2.6 million (2020: $13.0 million) in assistance under the Federal Government's JobKeeper program prior to its completion on 28 March 2021. This has been recognised as an offset to Employee benefits in the Consolidated statements of comprehensive income for the year ended 31 December 2021. The SAL Group received $3.9 million cash in respect of JobKeeper assistance in the year ended 31 December 2021 (2020: $11.7 million). This is reflected in the Consolidated statements of cash flows.

Sydney Airport, as an eligible airport under the Domestic Airport Security Costs Support (DASCS) program, is entitled to the Federal Government's program funding allocation for security screening costs. This program commenced in March 2021 and concluded in December 2021. The SAL Group recognised $14.6 million as part of the Aeronautical security recovery in the Consolidated statements of comprehensive income for the year ended 31 December 2021. The cash received associated to DASCS amounted to $8.5 million and is reflected in the Consolidated statements of cash flows. Any funding not received is recognised as receivables in the Consolidated statements of financial position.

In September 2021, the Federal Government announced the International Aviation Security Charges Rebate (IASCR) program, designed to cover the in-month shortfall in security operating cost recovery for international operations. The program runs from 1 October 2021 to 31 March 2022. Sydney Airport is an eligible airport under the program but has not yet received any funding from the IASCR during the period ended 31 December 2021. Any funds not received is recognised as receivables in the Consolidated statements of financial position.

Similar to the prior year, a review of all capital projects in progress was undertaken during the year. Following the review, a $10.5 million (2020: $28.2 million) impairment charge was recognised in respect of certain capital projects, that due to their nature, are not expected to progress. This is reflected in the Consolidated statements of comprehensive income.