1 00:00:00,000 --> 00:00:02,639 Speaker 1: Balkome. The airport's launched at one point four billion dollar 2 00:00:03,160 --> 00:00:05,600 Speaker 1: capital raise. The money is for the ongoing Rejube, of course, 3 00:00:05,640 --> 00:00:07,480 Speaker 1: which has a bill of about six and a half billion. 4 00:00:07,480 --> 00:00:09,360 Speaker 1: As Andrew was telling us a few moments ago, round 5 00:00:09,360 --> 00:00:11,680 Speaker 1: a third of that's going for the domestic terminal alone. 6 00:00:12,000 --> 00:00:14,319 Speaker 1: The CEO at the airporter's Kerry Hudahan and Oui of 7 00:00:14,360 --> 00:00:17,759 Speaker 1: course and is with us. Good morning, Good morning mine. 8 00:00:17,800 --> 00:00:19,720 Speaker 1: What was your assessment of the risk in going to 9 00:00:19,760 --> 00:00:22,720 Speaker 1: the market for such a large amount of money. 10 00:00:24,040 --> 00:00:26,800 Speaker 2: What's been interesting, Mark? At the point we announced the 11 00:00:26,840 --> 00:00:30,479 Speaker 2: program back in twenty twenty two, you know, it was 12 00:00:30,520 --> 00:00:32,840 Speaker 2: signaled that was a key question. The market was asking 13 00:00:32,960 --> 00:00:35,360 Speaker 2: is there going to be a need for equity, and 14 00:00:35,400 --> 00:00:38,520 Speaker 2: at the time we said, well that depends on business performance, 15 00:00:39,720 --> 00:00:41,560 Speaker 2: the rate and pace of the capital bill, et cetera. 16 00:00:41,640 --> 00:00:44,000 Speaker 2: So it had been signaled to the market and we 17 00:00:44,080 --> 00:00:46,680 Speaker 2: were pleased. We've we've had a very positive response so far. 18 00:00:47,440 --> 00:00:50,920 Speaker 2: We looked to wrap up the institutional placement this morning 19 00:00:50,920 --> 00:00:52,480 Speaker 2: and then we'll move on to the retail officer. 20 00:00:52,600 --> 00:00:54,280 Speaker 1: So no question is going to be filled and filled 21 00:00:54,280 --> 00:00:55,560 Speaker 1: successfully and easily. 22 00:00:57,160 --> 00:00:58,319 Speaker 2: Sorry, could you repeat them mute? 23 00:00:58,400 --> 00:00:59,720 Speaker 1: Would it be filled easily. 24 00:01:01,640 --> 00:01:04,840 Speaker 2: Well, certainly through the positivity we had yes yesterday. We 25 00:01:04,880 --> 00:01:07,320 Speaker 2: think it, we think it will be. We're going to 26 00:01:07,360 --> 00:01:09,679 Speaker 2: wrap that up this morning. But yeah, very very positive 27 00:01:09,680 --> 00:01:10,520 Speaker 2: soundings came back. 28 00:01:10,680 --> 00:01:12,520 Speaker 1: So if you've got a story to tell, there is 29 00:01:12,600 --> 00:01:14,760 Speaker 1: plenty of money out in the New Zealand economy to 30 00:01:14,800 --> 00:01:15,959 Speaker 1: be collected up. 31 00:01:17,360 --> 00:01:19,680 Speaker 2: Well, in the New Zealand economy as well as Australia, 32 00:01:19,840 --> 00:01:24,119 Speaker 2: you know, there is absolutely investment money out there MIC 33 00:01:24,400 --> 00:01:28,440 Speaker 2: and they are looking for opportunities or the right opportunities 34 00:01:28,520 --> 00:01:28,840 Speaker 2: for them. 35 00:01:29,160 --> 00:01:32,679 Speaker 1: Tell us about the timing and the connection with the 36 00:01:32,720 --> 00:01:35,600 Speaker 1: economic story in this country currently and whether that had 37 00:01:35,640 --> 00:01:38,840 Speaker 1: any connection at all. 38 00:01:38,959 --> 00:01:41,679 Speaker 2: Well, I think, as I said, we'd signaled the need 39 00:01:41,760 --> 00:01:44,000 Speaker 2: for it. I think you have an environment where we 40 00:01:44,040 --> 00:01:47,840 Speaker 2: do know that we've got a more muted economy of 41 00:01:47,880 --> 00:01:50,560 Speaker 2: Actually our figures last month even just from a traffic perspective, 42 00:01:50,600 --> 00:01:53,440 Speaker 2: you had domestic passengers five percent down, you had international 43 00:01:53,440 --> 00:01:55,920 Speaker 2: passengers three percent out. So we've kind of got the 44 00:01:56,000 --> 00:01:59,320 Speaker 2: split split market at the moment of what we're seeing. 45 00:02:00,280 --> 00:02:03,080 Speaker 2: But investors are looking to say, well can look through that. 46 00:02:03,120 --> 00:02:05,920 Speaker 2: They're generally not looking at the next four quarters for 47 00:02:06,040 --> 00:02:09,079 Speaker 2: investment like an infrastructure company like an airport, they are 48 00:02:09,120 --> 00:02:12,680 Speaker 2: looking long run over the coming years. 49 00:02:12,880 --> 00:02:17,200 Speaker 1: Given you're an international monopoly of sorts, does that help you. 50 00:02:19,600 --> 00:02:23,840 Speaker 2: Well? Generally for investors when they're looking at infrastructure related stocks, 51 00:02:23,880 --> 00:02:26,079 Speaker 2: you know, and whether in the Australian market you've got 52 00:02:26,120 --> 00:02:29,959 Speaker 2: transurban and other airports they are looking for. I guess 53 00:02:30,000 --> 00:02:32,520 Speaker 2: the factors to say, is there investment being made? Is 54 00:02:32,560 --> 00:02:35,480 Speaker 2: there a potential growth pathway here that they can see 55 00:02:35,480 --> 00:02:39,040 Speaker 2: that makes sense that that investment that they're making that 56 00:02:39,080 --> 00:02:42,160 Speaker 2: they expect to see a return in medium to long term. 57 00:02:42,520 --> 00:02:44,720 Speaker 1: The discount you went to the market with, who comes 58 00:02:44,800 --> 00:02:48,920 Speaker 1: up with that? How literally does that work? 59 00:02:49,680 --> 00:02:51,519 Speaker 2: Great question? I mean there's a lot of time and 60 00:02:51,560 --> 00:02:54,000 Speaker 2: effort that's spent in obviously going through the due diligence 61 00:02:54,040 --> 00:02:59,120 Speaker 2: process as well as understanding the market expectation comparable raises. 62 00:02:59,200 --> 00:03:02,320 Speaker 2: So yes, many an evening has been spent on that night. 63 00:03:02,520 --> 00:03:05,760 Speaker 1: And what literally happens? You go, let's go seven sixty five, No, 64 00:03:05,840 --> 00:03:08,920 Speaker 1: I reckon seven fifty two. And then is it literally 65 00:03:08,960 --> 00:03:09,720 Speaker 1: that simple or not? 66 00:03:11,400 --> 00:03:14,200 Speaker 2: No? You generally look as far as the discounts from 67 00:03:14,200 --> 00:03:17,120 Speaker 2: an next dividend kind of adjusted, you've got the last 68 00:03:17,160 --> 00:03:20,160 Speaker 2: close so the day before for example, or in this 69 00:03:20,240 --> 00:03:22,959 Speaker 2: case it would have been last Friday, the thirteenth of September. 70 00:03:23,000 --> 00:03:25,400 Speaker 2: You also look at things like a five day view 71 00:03:25,440 --> 00:03:28,400 Speaker 2: Apple volume weighted average, So there's a number of things. 72 00:03:28,440 --> 00:03:30,920 Speaker 2: It's the well worn path in terms of looking at 73 00:03:30,960 --> 00:03:33,959 Speaker 2: what that performance has been. And certainly we've gone to 74 00:03:34,040 --> 00:03:36,760 Speaker 2: the market at the discount that we did. You know, 75 00:03:36,800 --> 00:03:42,080 Speaker 2: it hasn't been sub seven dollars since back during COVID. 76 00:03:41,800 --> 00:03:44,760 Speaker 1: Time the Hawkins deal. This is my ongoing and fascination 77 00:03:44,840 --> 00:03:47,360 Speaker 1: with infrastructure in this country. How tight's the Hawkins deal 78 00:03:47,440 --> 00:03:50,400 Speaker 1: or the Hawkins contract at eight hundred million dollars? Is 79 00:03:50,400 --> 00:03:52,600 Speaker 1: it eight hundred full stop or it's eight hundred and 80 00:03:52,640 --> 00:03:53,680 Speaker 1: we'll see where we end up. 81 00:03:55,720 --> 00:03:59,080 Speaker 2: So the contract is structured as a construction management agreement, 82 00:03:59,200 --> 00:04:01,720 Speaker 2: so it's you know, in the New Zealand market you 83 00:04:01,760 --> 00:04:05,240 Speaker 2: don't tend to get sixed price contracts per se. That 84 00:04:05,360 --> 00:04:09,080 Speaker 2: means we've engaged them to manage the construction process, methodologies, 85 00:04:09,120 --> 00:04:12,960 Speaker 2: sequencing for curement. We have a role where there is 86 00:04:13,000 --> 00:04:15,920 Speaker 2: shared risk in that might particular when you look at 87 00:04:15,920 --> 00:04:18,480 Speaker 2: a twenty four to seven operating environment like ours, that 88 00:04:18,760 --> 00:04:21,280 Speaker 2: our contract is not going to have influence on some 89 00:04:21,320 --> 00:04:24,159 Speaker 2: of the decisions. They're not going to take all that 90 00:04:24,279 --> 00:04:27,120 Speaker 2: risk on. But we've got milestones and various things in 91 00:04:27,160 --> 00:04:29,920 Speaker 2: place to ensure that we can manage and mitigate those 92 00:04:30,000 --> 00:04:31,920 Speaker 2: risks along the way. 93 00:04:32,080 --> 00:04:34,880 Speaker 1: Well, I've got you the Hamilton thing yesterday with Jetstar 94 00:04:34,920 --> 00:04:38,800 Speaker 1: along with Dunedin. Is that part of you charging too much? 95 00:04:38,920 --> 00:04:40,760 Speaker 1: Any alignes are now going to tell you what will 96 00:04:40,760 --> 00:04:41,360 Speaker 1: go elsewhere. 97 00:04:43,360 --> 00:04:45,640 Speaker 2: It's an interesting one. I mean, I think there's been 98 00:04:45,760 --> 00:04:48,080 Speaker 2: a kind of some supposition on that. I think there's 99 00:04:48,120 --> 00:04:50,280 Speaker 2: two things One that if I'm on us from an 100 00:04:50,360 --> 00:04:54,800 Speaker 2: ensetting perspective, additional international capacity and connectivity between New Zealand 101 00:04:54,839 --> 00:04:56,680 Speaker 2: Australia is a really good thing. I think last time 102 00:04:56,720 --> 00:04:59,880 Speaker 2: you and I spoke, we talked about tourism sitting at about 103 00:04:59,800 --> 00:05:02,919 Speaker 2: eight percent recovery. Australia is one of the slowest markets 104 00:05:02,960 --> 00:05:05,120 Speaker 2: to recover, So if we can stimulate that, that's a 105 00:05:05,160 --> 00:05:08,440 Speaker 2: great thing. In terms of the pricing, frankly, I don't 106 00:05:08,480 --> 00:05:11,720 Speaker 2: buy that we actually are cheaper than comparable airports in 107 00:05:11,839 --> 00:05:13,920 Speaker 2: New zeal at the moment. And if you look at Jetstar, 108 00:05:14,000 --> 00:05:17,480 Speaker 2: they've grown twenty nine percent domestically out of Auckland in 109 00:05:17,520 --> 00:05:20,280 Speaker 2: the last year and actually thirty three percent internationally. So 110 00:05:20,320 --> 00:05:23,000 Speaker 2: I guess the question you might ask is to say, 111 00:05:23,080 --> 00:05:27,000 Speaker 2: is are we seeing airlines actually identifying opportunities for them 112 00:05:27,040 --> 00:05:30,200 Speaker 2: to grow in a market that's got relatively muted competition. 113 00:05:30,400 --> 00:05:32,520 Speaker 2: Right now, you've got two airlines they have ninety percent 114 00:05:32,520 --> 00:05:34,080 Speaker 2: of the market's share across the Taisman. 115 00:05:34,320 --> 00:05:35,840 Speaker 1: Always good to have you on the program, appreciate it 116 00:05:35,880 --> 00:05:38,119 Speaker 1: very much, Kerry Hoho to hang Anoui, who's the CEO 117 00:05:38,200 --> 00:05:38,960 Speaker 1: at Auckland Aport. 118 00:05:39,480 --> 00:05:42,400 Speaker 2: For more from the Mic Asking Breakfast, listen live to 119 00:05:42,480 --> 00:05:45,559 Speaker 2: news talks. It'd be from six am weekdays, or follow 120 00:05:45,600 --> 00:05:47,160 Speaker 2: the podcast on iHeartRadio.