Siphamandla Mthethwa


Airports Company South Africa recorded a loss before tax of R3.6 billion; a significant contrast to the profit before tax of R1.8 billion in the previous year. This unprecedented loss reflects the extent to which COVID-19, multiple lockdowns and travel restrictions have impacted the Group’s operational performance.

The performance is primarily driven by lower revenues of R2.2 billion (FY2019/20: R7.1 billion), exacerbated by a reduction in the fair value of our investment properties of R216 million (FY2019/20: R721 million gain) and the cost of separation packages paid to employees for the early retirement and voluntary separation processes amounting to R243 million.

The financial year ended 31 March 2021 was the most challenging year in the Group’s 28-year history. Starting from the end of March 2020 through to March 2021, passenger numbers decreased persistently as COVID-19 became a global pandemic, countries closed their borders and South Africa went into different levels of lockdown. At the end of the financial year, departing passenger numbers had fallen to 21.8% of FY2019/20 levels.

The Group acted quickly and decisively from April 2020 to conserve cash, adjusting our pre-COVID-19 Financial Plan by implementing a R900 million operating cost reduction programme and suspending all uncommitted work on capital expansion while focusing on licence-to-operate activities limited to R810 million of capital investments for the year.

Performance at a glance


R2.2 billion

7.1 billion)


-R2.6 billion

profit R1.4 billion)


R770 million

(FY2020/21 target:
R810 million)





-R1.8 billion

R2.6 billion EBITDA)


R226 million

R1.2 billion)


R770 million

(FY2020/21 target:
R810 million)





Total revenue decreased by 69.8% to R2.2 billion (FY2019/20: R7.1 billion). Multiple lockdowns affected revenue hardest owing to lower passenger numbers and aircraft movements that created massive revenue losses since the beginning of the financial year.

Aeronautical revenue

Aeronautical revenue fell by an unprecedented 78.4% to R810 million (FY2019/20: R3.7 billion). The decline is predominantly a result of reduced air traffic movements and passenger numbers as the spread of the COVID-19 and related virus containment measures restricted travel locally and in most parts of the world.

Non-aeronautical revenue

Non-aeronautical revenue declined by 60.3% to R1.3 billion (FY2019/20: R3.4 billion) driven by reduced passenger numbers and retail service offerings because of the containment measures. The retail business was severely impacted as a consequence of the forced closure of all retail tenants during the hard lockdown, except for those that provided essential services.


Operating costs decreased by 25.5% to R1.9 billion (FY2019/20: R2.6 billion). This significant reduction was achieved through a timely review of the Group’s Strategy to reduce the operating cost base. This was done in response to the potential financial challenges caused by the reduction in traffic volumes.

Property rates and taxes form a significant part of our fixed operating costs, comprising 14.1%% of the total costs. The expenditure remained the same as that of the previous year, amounting to R274 million (FY2019/20: R274 million). 

Other operating expenses were also curbed to ensure – as far as practically possible – costs appropriately reflect the levels of operation. Security costs were reduced by 17.1% to R423 million (FY2019/20: R511 million); 


Employee expenditure increased by 3.3% to R1.9 billion (FY2019/20: R1.8 billion) in the current year. The expenditure was largely contained through the implementation of zero salary increases and no incentive bonuses, and reduced recruitment costs. The expenditure containment was offset by the cost of separation packages paid to employees for the early retirement and voluntary separation processes – amounting to R243 million – the benefits of which will be realised in the new financial year. The staff cost reduction is intended to resize the operations to be commensurate with traffic volumes.

Staff transport costs amounted to R90 million (FY2019/20: R117 million). The company resolved to wind up the initiative, which was launched in 2019 for the provision of safe and reliable transportation to shift employees after business hours. The winding up process is anticipated to be completed in the new financial year.


Trade and other receivables decreased to R959 million (FY2019/20: R1 billion) owing to significantly lower revenue generated in the year, credit reprieve assistance offered to customers of R1.2 billion, and irrecoverable debt of R201 million which has been written off. Tax receivable decreased from R616 million at the beginning of the year to R239 million due to tax refunds received. Tax audits conducted by the South African Revenue Services (SARS) resulted in additional income taxes levied on the company. 

The audits pertained to prior years of assessments, wherein SARS disallowed certain capital allowances on airport assets, among other related issues. Deferred tax liability decreased to R295 million from R1.6 billion as of 31 March 2021 owing to significant tax losses incurred in the current year.


The fair value adjustment of Investment Properties resulted in a loss of R216 million (FY2019/20: R721 million fair value gain). The valuation decrease was driven mainly by lower market rental growth assumptions on the back of a weak macroeconomic environment and the impact of COVID-19.


The opening balance for irregular expenditure in the current year was R1.2 billion (FY2019/20: R727 million). Irregular expenditure incurred in the current year amounts to R282 million (FY2019/20: R560 million) relating to non-compliance with regulations that govern supply chain management. A significant portion of this pertains to one major capital expenditure programme at O.R. Tambo International Airport.

The Group has implemented the National Treasury Irregular Expenditure Framework through the Group’s newly established Loss Control Function for detection, investigation, assessment and performance of determination tests. It should be noted that R828 million of irregular expenditure balance was removed in the current year. In the new financial year, the Loss Control Function will continue investigating the reported irregular expenditure to appropriately assess the remaining balance of R635 million. High-value irregular expenditure detection, investigation, assessment and determination investigations have been prioritised.


As of 31 March 2021, the Company’s debt level amounted to R9.3 billion (2019: R6.4 billion), comprised of R4.9 billion in bonds issued under the Domestic Medium-term Note Programme, amortising loans of R2.1 billion and preference shares of R2.3 billion. The increase in the debt level is attributable to the Development Bank of Southern Africa (DBSA) loan of R810 million and preference shares issued to government amounting to R2.3 billion.

The Group repaid R1.6 billion in debt during the year comprising amortising loans of R296 million and shortterm banking facilities of R1.35 billion. Interest payments for the financial year totalled R560 million, bringing total debt service costs to R2.2 billion. Funding sources as of 31 March 2021 were as follows:

  • Inflation-linked bonds (18%)
  • Fixed-rate bonds (33%)
  • DFI loans (23%)
  • Preference shares (26%)

Fixed-rate debt comprised 81% of total debt as at the end of the financial year compared with 72% at the end of the previous year. The gearing level increased to 23%  (FY2019/20: 17%) on the back of the DBSA loan and preference shares.


After downgrading Airports Company South Africa’s credit rating on 26 June 2020, Moody’s affirmed the company’s global scale rating at Ba2 on 24 November 2020. The affirmation of Airports Company South Africa’s global scale rating reflects a one-notch uplift to the baseline credit assessment of Ba3 owing to Moody’s assumption of strong support from government. The national scale rating was upgraded to from Aa3. za in line with the revised mapping for the South African national rating scale. The negative rating outlook was left unchanged, largely reflecting the impact of COVID-19 on the Company, and the negative outlook on government rating.


The Group continues to monitor the business environment to determine appropriate responses to ensure long-term financial sustainability. Capital expenditure remains limited to maintenance and refurbishments, informed by statutory requirements. The Group also continues to identify efficiencies in its operations, keeping operating expenses to a minimum.