Aer Rianta duty-free profits gain altitude despite turnover decline
Aer Rianta International, the overseas duty-free arm of the Dublin Airport Authority, improved its after-tax profit to €35 million last year in spite of a 14 per cent fall in turnover.
Accounts just filed for ARI, which operates in 12 overseas markets, show turnover declined to €59.7 million in 2011 from €69.4 million in the previous year.
This reflected the sale of certain businesses in the Commonwealth of Independent States (CIS), a loose association of former Soviet republics.
The CIS accounted for €55 million of ARI’s turnover last year, down from €65 million in 2010.
The company returned an operating profit of €4.5 million last year compared with a loss of €15.7 million in 2010.
This turnaround largely reflected the fact that the company booked a once-off €19.6 million impairment charge in 2010 related to financial assets.
ARI earned €26.9 million in income from financial assets and investments in 2011 and an €8.7 million profit on the disposal of investments in associates.
When a restructuring charge of €4.8 million and tax of €465,000 were deducted, the company closed last year with a profit of €35.1 million.
This compared with a surplus of €2.3 million in 2011.
The accounts relate to the overseas retail operations of ARI and do not include the duty-free shops in Dublin, Cork or Shannon that it also runs.
The trading performance was described in the directors’ report as “satisfactory”.
ARI’s leadership changed in 2011 with Jack MacGowan taking over from director general Eamon Foley, who left the company in November last year.
The accounts state that Mr Foley received a voluntary severance package of €867,000 on leaving the company.
This comprised a lump sum of €437,000 and a payment of €68,000 annually for 6.3 years to bridge the gap to normal retirement age.
These sums are taxable.
It is understood that the lump sum amounted to about two years’ salary.
A spokesman for the DAA said the severance scheme was open to all employees and was aimed at securing a “material reduction in the operating costs of the company in response to a more challenging global economic climate”.
Twenty-five ARI staff availed of the redundancy scheme and the DAA spokesman said this generated annual payroll cost savings of €3 million for the company.
The spokesman said Mr Foley’s amounts were calculated automatically under the terms of the severance scheme, on the same basis as every other participant.
ARI incurred a total restructuring charge of €4.8 million last year related to its voluntary severance programme.
The duty-free operator closed 2011 with 63 staff compared with 78 in the previous year.
Its payroll costs reduced to €4.4 million from just under €6 million in 2010.