AIA set to rake in profits
Expansion projects will raise Athens airport’s capacity in three phases, ending in 2045
Growth and profit opportunities for the Athens International Airport (AIA) make its stock a very attractive proposition, according to analysts.
Investment bank Axia Ventures gives a buy recommendation on AIA stock, with a target price of €9.10 per share. It notes in its analysis that the recently listed stock is a high-value, low-risk recommendation.
Three factors attractive to investors are: the renewal of the lease for the airport for 22 years; an estimated 15% return on investment; and the operator’s expected distribution of 100% of profits as dividend. Indeed, the analysts estimate that, at present share levels, the dividend yield will reach 8.5% in 2024, 8.4% in 2025 and 8.1% in 2026.
AIA is Greece’s largest airport, accounting for 38% of total passenger traffic in the country: Arrivals have many options of connections by air and by sea.
AIA will benefit from the high level of tourist arrivals, but it also plans to increase its destination network. IATA, the global air transport association, estimates that AIA traffic will grow at an average 1.9% annually until 2046, reaching 43.7 million passengers at the end of that period.
A first phase of upgrades is expected to be completed by early 2028 or early 2029. It will expand the airport’s capacity from the current 26 million passengers to 33 million, with retail and parking spaces increasing 63% and 40%, respectively.
When it opened in 2001, the airport could serve 16 million passengers.
Axia Ventures forecasts that turnover will increase 2.2% this yeer, to €617.1 million and that this growth rate will be sustained at east until 2028. Earnings before interest, taxes, depreciation and amortization (EBITDA) will decline 2.1%, to €374.3 million, because of increased spending on capacity expansion. By 2028, adjusted EBITDA should reach around €417 million, the investment bank says. Net profit is forecast to reach €195 million in 2024 and €192 million in 2025.
The last expansion phase, to be completed in 2045, will include a new terminal.
