S. Africa Airports Operator Avoids Eskom Pitfalls to Post Profit

(Bloomberg) -- South Africa’s airports operator posted its eighth consecutive annual profit, setting it apart from other key state-owned companies in the country that need government bailouts to keep running.

“We are a state-owned company that pays dividends, so what maybe can happen is for other companies to come and learn from us,” Acting Chief Executive Officer Bongiwe Mbomvu said in an interview in Johannesburg on Tuesday. The company has made improvements to how decisions are made and who is held responsible for them, she said.

“What you see today, the health of the balance sheet, is exactly because of that,” Mbomvu said. “We haven’t asked for any bailouts.”

That contrasts with the situation at many of South Africa’s other state-owned firms, with management at power utility Eskom Holdings SOC Ltd., South African Airways, arms maker Denel SOC Ltd. and the state broadcaster regularly seeking financial support to stay operational.

Acsa, which operates South Africa’s nine largest airports, reduced its interest-bearing debt by 2.3 billion rand ($156 million) to 6.6 billion rand, even as rising costs and operational challenges reduced its profit. Net income declined to 227 million rand for the year to end-March from 552 million rand.

South Africa’s government owns about 75% of Acsa, with the Public Investment Corp., the state pensions manager, holding 20%.

“We have now produced a profit in all but one of the 26 years since the company was formed,” Mbomvu said.

To contact the reporter on this story: Prinesha Naidoo in Johannesburg at pnaidoo7@bloomberg.net

To contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, ;Gordon Bell at gbell16@bloomberg.net, Alastair Reed, Jacqueline Mackenzie

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