It said in its financial results for the period, made available yesterday, that the profit had declined by 27 per cent and as a result it will not give dividend and use the funds to support further investment.
“The board has decided not to declare interim dividend and to use the funds to support further investment on operating equipment and financing maturing obligations,” the statement said.
Swissport said further that dividend was not given “due to significant spending made on the cargo facility (26.52bn/ )” as well as continued investment in new equipment and technology in this year.
The airport ground handlers profit declined to 6.27bn/- for the six months ended June compared to 8.64bn/- of the corresponding period last year due to fall in flight frequencies and volume of cargo.
The company’s financial results for the six months ended June showed flight frequencies were 10 per cent below the same period last year while the volume of cargo handled decreased by 7.0 per cent.
“The reduction in flight frequencies is a result of the change in operational plan by some of our airline customers while the decline in the volume of cargo handled is mainly due to general decrease of imports for the period under review,” stated the report.
There is an increased competition in the ground handling business at Julius Nyerere International Airport and Kilimanjaro International Airport after new operators came in.
“Whilst we retained our customer portfolio, despite the competitive environment, the decline in revenue was attributable to reduced volumes in both product lines,” reads part of the statement.
The prospects of the performance of our airline customers indicate no significant change of their performance to the year ends while cargo volumes are expected to remain constant.
To cope with the changing and demanding business environment, Swissport will continue to enhance operational performance, investing in ground handling equipment, technology and human resources development.
The company’s revenue for the period under review went down by 12 per cent to 26.10bn/- from 29.53bn/- in 2016.
Despite revenue decrease, operating costs remained the same as prior year mainly due to the amortisation of the new cargo import facility which has largely offset the savings made year to date.
Consequently, profit before tax decreased by 28 per cent from 12.34bn/- to 8.92bn/-.
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