Hello, and thank you for standing by. Welcome to the Auckland Airport Annual Results 2023 conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand has been raised. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Chief Executive, Carrie Hurihanganui. ... Kia ora koutou katoa. Welcome, and good morning to everybody joining the call. With me today is Chief Financial Officer Phil Neutze, and I am pleased to be able to share the financial results for the 12 months to 30 June 2023, including Auckland Airport's first dividend and full year underlying profit in three years. Well, it's been a year marked by the strong return of international travel and the reestablishment of not only many airlines and routes, routes that had operated to Auckland previously, but also new airlines and some new exciting routes. It's also a year that has seen us getting underway with the most significant upgrade of Auckland Airport in its history. As New Zealand's main gateway, our infrastructure program reflects this responsibility and is necessary investment that will deliver critical assets that will have decades of ongoing use and deliver the uplift and experience travelers are seeking. Now, we have lots to cover today, and before we get into Q&A, so suggest we jump straight into it on slide four to kick things off. It's certainly been a year of forward momentum towards transformative change. You know, passenger movements were up 183% on the prior year to 15.9 million, primarily driven, and you can see the numbers there, that international was up 480%. So as those borders have opened and recovery was well underway and domestic up 90%, with 25 airlines now operating out to 40 destinations. Now, the full year revenue increased by 108% from the prior year to NZD 625.9 million, with lifts across aeronautical, retail, commercial, and property revenue lines. Operating EBITDAFI of NZD 397 million is up by 175% on the prior year, and this sees a lift in the EBITDAFI margin to 63% from 48% in the prior year. FY 2023 sees a net profit after tax of NZD 43.2 million. Now, that is down 77% and earnings per share of NZD 0.0293, with the net underlying profit after tax seeing an uplift from the prior year to NZD 148.1 million and the net underlying profit per share of NZD 0.1006. Capital expenditure, you'll see that's up 156% on the prior year to NZD 647 million, reflecting what has been a record year of capital investment across the precinct, and we're seeing that through an increased and continuing pickup in the run rate. The majority focus of NZD 378 million was on core aeronautical projects and a further NZD 269 million in commercial activities. Now, in June this year, you might recall, we announced our Price Setting Event 4 outcomes and a target return of 8.73%, which spans the 2023-2027 financial years, and was the result of 24 months of extensive consultation with major airlines. Now, after freezing prices for 12 months to help airlines rebuild following the borders reopening, the new charges for PSE4 took effect from July 1 this year. PSE4 will see NZD 5 billion investment in aeronautical infrastructure, of which NZD 3.1 billion will be commissioned between now and the end of the 2027 financial year. Of that, NZD 2.6 billion is reflected in the new airline charges for the pricing period. A final dividend of NZD 0.04 per share will be paid and is imputed to 100% for qualifying shareholders, representing a payout of 73% of underlying profit for the second half of the 2023 financial year, and is the first dividend to shareholders since 2019. With the dividend payable for FY 2023, shareholders can once again participate in the dividend reinvestment plan at a 2.5% discount. If we jump to slide five, these full year results do reflect improved financial performance across all passenger-driven lines of business, combined with continued growth in commercial property. Despite actually the aeronautical prices held at FY 2022 levels for the first year of PSE4, revenue from airfield and passenger services charges lifted a combined 132% to NZD 219 million, reflecting strong passenger growth. Retail revenue was up by 477% on the prior year to, a hundred and thirty point nine million, with a progressive reopening of the retail stores and significant international passenger number growth, and that had an overall positive impact in the international retail space. Parking income also increased 120% to NZD 57.7 million, and we saw with the reopening of all parking products and the ongoing strong propensity to park, continuing. Property continues to be resilient, with investment property rental income of NZD 142.9 million, which is an increase of 27% on the prior year. That growth is primarily driven by new properties leased this year, rental growth from the existing portfolio, and part period contributions from new developments. If we move to slide six, Auckland Airport experienced a stronger than anticipated rebound in the domestic and international aviation markets over this past year. If we look by year's end, international seat capacity had recovered to 90% of pre-pandemic and domestic to 89%. The return of passenger flight also restored international freight capacity to 95% of pre-pandemic levels. Now, this was enabled by eight airlines either returning to previous or commencing new services to Auckland, compared to FY 2022. Slide seven. Now, that increase in passenger movements drove significant improvement across passenger-driven lines of businesses, which you can see in this comparison of June 2022 to June 2023. For retail, that greater number of stores open and increased trading hours saw income per passenger lift 57% on the same month last year. If you look from a parking perspective, as I mentioned, that revenue is up due to the combined impact of not only the passenger numbers, a rise in the average period of stay, which continued to creep up, and also customers trading up to higher value products. Hotels have also seen a step change in occupancy over the prior period, and you can see there that in June it reached 90% compared to June last year, but from a full year perspective, it was 75% annualized. Slide eight, please. Now our sights are set on the future and inspiring as we connect people in place. Our focus is to reconnect New Zealand to the world, and I think over this past year, we have worked very positively along with airlines to rebuild capacity, frequency, and those passenger numbers. We know how much our customers enjoy the shopping and dining experience as part of an overseas holiday or trip, and have worked very hard to ensure all the relevant travel-related products and services are fully operating to meet our customers' needs. I do want to acknowledge the rapid return of aviation has not always been a smooth experience for our customers. We are investing significant effort in addressing this with our partners across the ecosystem, and while we're seeing some tangible improvements over the last four five months, there is absolutely more work to be done, and I can assure you it's a priority for us to get this right. We've taken a disciplined approach to our infrastructure program, which is focused on adding the necessary capacity and resilience, as well as upgrading the existing assets to deliver to that purpose of connecting people in place and what a gate airport needs. Now, I'd like to hand over to Phil, who will take us through the financial performance in more detail before coming back to me. Phil? Thanks, Carrie. So it's exciting to see the business recovering strongly from COVID-19 and the confidence that's given us to get cracking on the Aerolocal Infrastructure Development Program, which you've heard a bit about lately. We're now on slide 10, and you can see that international pax recovered to 67% of pre-COVID FY 2019 numbers for the full year, and that's up from the 60% recovery that we showed at the half year. Domestic pax, on the other hand, softened slightly to 84% of pre-COVID for the full year, down 1% from the 85% at the half year. And as many of you will have experienced, domestic airfares are still very high, up circa 40% versus pre-COVID. That's the rise through Auckland Airport of domestic airfares. But despite this, domestic load factors averaged 86% in FY 2023 versus 84% pre-COVID, when airfares were a third lower. So there's some very effective yield management going on. On to slide 10. I won't dwell on this slide as it's self-explanatory, but a couple of things: aircraft movements and MACTOW recoveries are pretty consistent with the passenger recoveries versus pre-COVID. However, the slightly softer international MACTOW recovery compared with aircraft movements implies that there's a small reduction in the average international aircraft size in FY 2023 versus before COVID. Moving now to slide 12. Finally, we've moved back into underlying profit for the full year, and that's the first time since FY 2020. EBITDAFI margin also improved, up to 63% for FY 2023 versus 48% in FY 2022. But if we exclude both the early installment of NZD 5 million of flood-related insurance receipts in FY 2023 and the NZD 8.4 million of flood-related expenses that hit the P&L, the FY 2023 EBIT margin, EBITDA margin, I should say, was 65%, and this compares with 75% in pre-COVID FY 2019. Despite the net upwards revaluation in PP&E of NZD 203 million this financial year, all of... Almost all of which was booked to the revaluation reserve per accounting rules, we incurred a net P&L expense of NZD 15.6 million for some assets that were revalued downwards, and there wasn't sufficient prior period revaluation reserves to offset them. We also booked a NZD 140 million revaluation loss to the P&L for investment property, and that's up another NZD 46 million from the NZD 94 million loss booked at the half year. This was because of strong increases in discount rates and cap rates, and they weren't quite fully offset by the strong increases we're also seeing in market rents. I just remind you, both of these fixed asset revaluations are reversed from underlying profit. Moving now to slide 13, and there's a bit hidden in these numbers that I'm sure the broker analysts on the call would appreciate me explaining. So first, airfield income. It only increased by 42% versus aircraft movements, up 81% on the prior year, and this was, in part, well, in part reflected the NZD 3.5 million reduction in aircraft parking charges versus PCP. That was owing to them spending more time in the air as the COVID-19 recovery progressed, but also reflected a circa NZD 7 million increase in COVID recovery landing charges, discounts to airlines in FY 2023 versus FY 2022. So this sat at circa NZD 88 million for the year. Second, investment property income grew strongly, up NZD 30 million on PCP, but there's a bit of noise in there. So if we give you a breakdown, NZD 5.7 million of that related to straight-lining some leases that we hadn't previously straight-lined, and that relates to previous years. That won't be repeated in future years. NZD 5 million relates to Ibis Budget Hotel income increases, strong growth due owing to the growth in occupancy. That rate of growth will slow significantly next year. Four point nine million relates to the removal of rent abatements from FY 2022. That's locked in place and will stay in place. Two point seven million relates to current year straight lining of future lease increases. Again, that's locked and loaded and will stay. But if you look at the core growth in investment property rental, it boils down to eight point eight million of rental increases on existing property. As we've done market reviews or recycled properties, and another two point seven million growth from new properties that were either delivered halfway through or partway through last year, or sometime during this year. Turning now to operating costs on slide 14, we've experienced strong cost inflation, pressures right across the board, especially rates and insurance, which rose by around NZD 11 million or up 50% versus FY 2022. We also experienced strong volume-related cost growth in the asset management, maintenance, and airport operations bucket. It was a lot lower growth than the growth in packs that we experienced, but it was still significant. So we had NZD 23 million dollar increase in that bucket or up 35%, for versus FY 2022, which compares with packs up 183% for the year. That comprises a range of, subcomponents, like outsource operations, things like car parking, bus ops, baggage and trolley services. They were up by 64%. Repairs and maintenance was up by 10%. Power, gas, water, and waste, wastewater up by 30%, cleaning up by 80%, telecoms and IT apps up by 30%. So, all volume related, but somewhat less than the packs growth we had for the year. We also lifted marketing by over NZD 5 million, or nearly four times, versus FY 2022 to support the recovery, and professional services and levies were up by circa NZD 4 million, or nearly doubling. With a large chunk of this, the legal and consulting fees relating to the Price Setting Event 4 aeronautical pricing consultation that we've just completed and the Commerce Commission's Input Methodology review, and in fact, we're paying higher levies to the Commerce Commission as well. This resulted in total OpEx growth of NZD 73 million or 47% versus FY 2022. But if you adjust for the NZD 8.4 million of flat expenses, that brings OpEx down to circa NZD 220 million, which I think is around NZD 10 million above the range I guided back in February, and that was driven by higher inflation than we expected. Adjusting also for the NZD 4.3 million wage subsidy, that wasn't repeated in FY 2023, but we got it in FY 2022. Year-on-year OpEx growth falls to circa 40%. So looking forward, we're expecting the growth rate of OpEx to fall significantly in FY 2024, compared to what we experienced this year. We think it'll fall somewhere between 10% - 15%, which will be well below our expected revenue growth in FY 2022. Carrie will talk to our underlying profit guidance for FY 2024 shortly, but repeating recent tradition, I can also give you some clues around where depreciation and interest might fall in FY 2024. We think depreciation will be between NZD 175 million and NZD 185 million for FY 2024, and interest expense between NZD 75 million to NZD 85 million. Not long to go now before I hand back to Carrie. But let's first take a look at the CapEx on slide 15, and as the chart on this slide shows, we more than doubled the CapEx run rate in FY 2023 versus PCP, so up to NZD 650 million. We did have a slow start in H1 FY 2023, which prompted us to lower our CapEx guidance versus what we gave this time last year, but in the end, we delivered almost exactly equal to the midpoint of our original CapEx guidance of between NZD 600 million and NZD 700 million. The text on this slide gives a breakdown of the key CapEx projects undertaken in FY 2023, and I won't repeat that verbatim, but as you can see, terminal integration, enabling works, and the new multi-level transport hub dominated FY 2023 CapEx. And despite high aeronautical development activity, we also delivered an investment property run rate of around NZD 135 million, close to the midpoint of the NZD 100 million-NZD 200 million cadence that we often speak of for that segment. Moving now to slide 16. This slide summarizes the key components of Auckland Airport's balance sheet as at 30th of June 2023 and provides a comparison with June 2022. It's self-explanatory, so I'll leave you to peruse it at your leisure. We're now on slide 17, and net borrowings increased by NZD 340 million in FY 2023. This was the fund CapEx. We actually undertook NZD 625 million of debt capital markets borrowings in the year, but we also repaid NZD 300 million of maturing debt capital markets bonds that year. We still have considerable undrawn bank facility headroom.... That's sitting at circa NZD 950 million, but we expect to progressively draw down more of our bank capacity during FY 2024. Our credit metrics are very strong at the moment, however you look at them, versus banking covenants and also versus Standard & Poor's key thresholds for our A-minus credit rating. But these will weaken over our five year Price Setting Event 4 period, as we build circa NZD 2.5 billion of aeronautical capital work in progress that isn't yet generating cash returns. The investor presentation that accompanied our PSE4 pricing disclosure last week gave a comprehensive review of our planned aero CapEx over the next nine years, i.e., to the end of PSE5. But investors should also expect that our non-aeronautical CapEx will continue at around that, somewhere in the NZD 100 million-NZD 200 million per annum range over that period. Moving to my last slide now, for now, so that's slide 18. During this year, we announced the new dividend policy of paying out between 70% - 90% of underlying profit after tax. Covenant restrictions ceased at the end of the first half, so directors have declared a NZD 0.04 per share final dividend, and that represents 73% of second-half underlying profit. We've also reinstated the dividend reinvestment plan at a discount to market price of 2.5%, and the final couple of bullets on this slide provide details of how shareholders can opt in and the period over which the strike price will be determined. Back now to Carrie. Excellent. Thank you, Phil. If we move to slide 20, you know, it's fair to say the global recovery is well and truly underway. This slide shows the bi-directional growth for the year compared to the same period to end June 2019, between New Zealand and these markets. Now, clearly, we still have a way to go to full recovery, but it does amount to the much-needed turnaround for an industry that was somewhat in dire straits two years ago. If you move to slide 21, progress over the past year has seen New Zealand reconnecting with the world. If I remind you that the worst of the pandemic, only 12 airlines operating to 21 destinations, and quite honestly, operating pretty infrequently at that. During 2023, there will be 25 airlines to 40 destinations, with regional coverage across the Middle East, Asia, the Americas, and the Pacific Islands. Now, to compare that, pre-COVID, there were 29 airlines operating to 43 destinations, so certainly tracking in the right direction. Now, it will be a busy summer, with current projections showing the capacity between Auckland and North America set to exceed 2019 levels, with a forecast 29% increase in flights to North America for the November 2023 to March 2024 period, if you compare that to the same period in 2019. There's also been a promising recovery in capacity to and from China, and we know that obviously, the COVID restrictions were released later there, but we have five airlines now flying four routes, including some daily services, with capacity between China and New Zealand recovered to 78% of 2019, as at 30 June, and it's forecast to reach 93% of pre-pandemic levels by September this year. And then there's also plenty of activity on the Trans-Tasman. It is by far our biggest international market, and that has bounced back to 96% of pre-pandemic capacity. You've got frequent flyers like Air New Zealand, Qantas, and Jetstar, but they've also now been joined by AirAsia X, flying between Auckland and Sydney, and Batik Air, starting on the Perth route with their inaugural flight tomorrow morning, 25th of August. Moving to slide 22. Won't get into detail here, but the story is we're seeing stabilization in some of the long-term fundamentals. Inbound and outbound traveler growth is balanced, and we have seen the return of historic profiles for traveler mix across visiting family and friends, holiday and leisure, and business. Slide 23. Really, Auckland Airport is committed to delivering an efficient and seamless customer experience. You know, this year we've experienced storm events unlike anything before, causing the closure of the international terminal. And then there's been global aviation staffing shortages that have created ongoing issues across the aviation system, including mishandled bags, longer queues, off-schedule flights, and delays in the arrivals process. I mentioned earlier that it's not where we want it to be, and we have been taking a lead role across the ecosystem since the beginning of this year, to work collectively to solve the issues alongside border agencies, airlines, ground handlers, and other services. Now, there will be some quick wins, which we've already implemented, such as New Zealand and Australia separate lanes coming into arrivals and biosecurity, and then some things that will take longer to solve, but I certainly can assure you that we will be working at this until we get it right. And I just want to call out, we certainly have appreciated the patience and understandings of both travelers and our airport partners throughout the rebuild of the past year, and I'm certainly very proud of the Auckland Airport team for their tireless efforts in supporting the recovery of the business. Slide 24. Now, the ten-year roadmap here lays out the transformation journey of the aviation system in Auckland. As you know, airline consultation concluded in FY 2023, which sees a circa NZD 6.7 billion investment roadmap over the next 10 years. I'm not going to go into calling out each of the projects because you have had visibility of those in last week's presentation. But certainly a call-out that the international arrivals expansion stage two and the northern runway do remain on hold at this stage and are not in the roadmap. And ten years is quite a long time, so the reality, certainly in the back half or back five years, that there may be change or deferment to those over time. Slide 25. The integrated terminal. There's certainly been significant progress during FY 2023 on the enabling projects that get us towards that end result. Detailed design is on track for completion as planned, and the relocation of the airport's operations center has been completed, and construction of the new eastern bag hall is well advanced, and relocation of key eastern airfield operations, such as Checkpoint Charlie, have also been completed and are in operation. Slide 26. Alongside the return of travel, Auckland Airport has ramped up its infrastructure development. You know, we now have 400,000 sq m of aeronautical-focused infrastructure under construction, and one of the key projects in that is the 250,000 sq m airfield expansion. That is key to both enabling the development of the new domestic terminal to be integrated into the international terminal, but also to ensure we have the quality, resilient, and reliable airport infrastructure we need for the future. Slide 27. The new 2,500 bay transport hub and office development is really taking shape nicely. It will transform how the travelers arrive into the heart of the precinct. This is gonna be a world-class covered facility that is U.S. Gold Parksmart green standard, with a 14,000 sq m rooftop solar array. Now, the transport hub will provide for multi-mode transport access for today, and that's through integrating public transport, pickup and drop off, and parking, but also through two corridors set aside for future rapid mass transit. Now, we are on track for the pickup and drop off area to open in April 2024, and the remainder of the facility at the back end of next calendar year. Slide 28. Now, reopening the airport retail proposition was certainly a key priority to deliver to the experience our customers expect, and what you have seen is the resulting significant lift in retail income versus the prior year. Retail income of just under NZD 131 million was up 477% on prior year. And as at 30 June, all stores across both terminals were open, which is compared to 90% of domestic and 45% of the international retail stores in the prior period. Income per pax lifted 105% on the prior year to NZD 8.41, but it does still sit below FY 2019 levels of NZD 10.96. Now, this year we've made a move to a single duty-free operator, with Lagardère-owned Aelia Duty Free agreeing to a short-term extension of its contract to mid-2025. Not only is the single operator model in line with most overseas airports, it also creates the opportunity for the introduction of additional retail lines and improved in-store experiences, which we think is key as we go forward. Now, what was a seamless transition, it was also great to see about 90% of the existing duty-free employees transferring across to Aelia Duty Free. It's great for the employees, and it's also great in, great in regards to, the knowledge that they carried across with them. We've certainly seen a positive first couple of months of operation, with average transaction values higher than the pre-COVID equivalent. Now, through progressive renegotiations of expiring retailer licenses, rental abatements declined in the past year to 35% of what they were in the prior period, at NZD 58 million. And finally, it's really pleasing to see the omni-channel offering continuing to develop alongside the off-airport duty and tax-free service by The Collection Point, with both recovering well. The Collection Point has added new luxury stores from Westfield Newmarket, and we are seeing income up to five times on the prior year. Moving to slide 29. Parking also continues to outpace the passenger recovery, and you might recall we talked about this at the interim results. That this higher propensity to drive seems to continue alongside, they're staying longer, and they are trading up to premium products. As a result of that, revenue was double the prior period at just under NZD 64 million. Now, domestic parking is in line with pre-COVID levels, with international terminal parking constrained currently due to the transport hub construction. However, valet and park and ride products are providing alternatives for those who are wanting parking options. Now, in terms of development activity, I touched on the transport hub earlier, so I'm not going to repeat that, but we also have NZD 90 million of new transport projects underway that will bring forward access and amenity to our precinct and create smoother transport connections. These include new parking options with the opening of Park and Ride South to connect southern travelers. That will be opening late calendar 2024. Then improved precinct traffic flows with the addition of a new road, Te Ara Korako Drive, which connects George Bolt Memorial with Nixon. And a new priority lane on Laurence Stevens Drive for public transport and high-occupancy vehicles. Slide 30 really takes us into the commercial space, and commercial property really does remain resilient, with development momentum continuing. FY 2023 saw a 15% increase in the rent roll to NZD 147 million, and there was a 4.9% decrease in the portfolio value to NZD 2.9 billion due to a decline in market cap rates. Now, rental income was up 27% to NZD 143 million. Phil touched on those earlier. and we also have a solid development pipeline that have continued on both new and existing tenants, including completion of the Healthcare Logistics and Kerry Logistics, which added just under 24,000 sq m of net lettable area, and nine new developments currently under construction, which are expected to add NZD 40 million in rental income once completed. Construction is well underway on the Mānawa Bay premium retail outlet center. Strong interest continues coming in from major international brands for the 100+ store center, with more than 50% net lettable space now leased, and the project is on track to complete in the second half of 2024. And finally, in the joint venture with Tainui Group Holdings, the Te Arikinui Pullman Hotel fit-out has progressed, with opening now planned before the end of this calendar year, and the Mānawa remains on hold in the short term. However, fit-out is ready to reactivate as demand picks up. Slide 31. Now, as the upgrade of Auckland Airport gets underway in earnest, we absolutely remain focused on the sustainability goals that we have with investments to progress climate change goals and create a sustainable airport. Now, not only are we playing our part just in reducing carbon emissions and waste from our own operations, but we are assisting the wider aviation system's sustainability goals. We have developed a clear pathway to reduce our Scope One and Two emissions to reach net zero by 2030, aligned with the 1.5-degree trajectory. And an example of that would be the commencement of our program, to phase out gas for heating and cooling from the terminals. Now, the first unit has been replaced, and we're running trials on that to work through all the wrinkles, I guess you could say. But when that is complete, it will reduce carbon emissions by 1,500 tons per annum. Our investment in infrastructure will support the deployment of new lower emission aircraft technology, and we already actually have a range of initiatives in play to reduce fuel burn from non-flying activities. That's from predictive technologies that manages pushback timing, things like ground power units available to plug in at the gate, and we've installed 24 EV chargers on the airfield for ground service equipment. We're certainly focused on the customer in delivering wider economic contribution and in being a responsible employer, which includes health, safety and well-being, diversity, inclusion, and social impact. Examples I'd just call out there is we actually have achieved the 40/40/20 across the board, executive and tier three levels of leadership from a gender perspective, and we recently announced enhancing our parental leave policy to offer people a great place to work that supports their family lives, too, including when they are transitioning to parenthood. Finally, being a good neighbor, and that includes community and tangata whenua involvement and support. You know, when the labor market was tight in June-July last year, sorry, we held a job fair for all employers across the precinct, and that had a 17% conversion rate, which is not too bad by anyone's standards. Now, working alongside iwi, we are looking at design across the projects we have underway, and we also granted almost NZD 385,000 to community projects to support learning, literacy, and life skills in South Auckland. So with that, we'd like to go to slide 32, which is my last slide. As we look ahead to the 2024 financial year, we continue to see positive signs in the market. Increased connectivity, interest from airlines, and what we're seeing playing out. So reflecting this, we are providing guidance of underlying profit after tax of between NZD 260 million and NZD 280 million, and that is based on anticipated domestic passenger numbers of 8.5 million and international passenger numbers of 10.6 million. Now, with the significant investment across the airport precinct, we are also providing guidance on capital expenditure of between NZD 1 billion and NZD 1.4 billion in the year. Now, as always, the CapEx, the guidance is subject to any material adverse events and other criteria called out on the slide, as I am sure you're aware. But on that basis, I will round out, and I'll hand back to Phil to walk through the regulatory update, and then post that, I think we'll go straight into questions. Phil? Thanks, Carrie. So we're now on slide 34, and as Carrie mentioned, after we do this quick regulatory update, we're into the Q&A. So on 8th of June, we announced the aeronautical price reset for the final four years of the five-year pricing event four, which concludes in June 2027. And last Thursday, on the 17th of August, we released the detailed price setting event 4 price setting disclosure documents. And this slide summarizes the key drivers of the significant aeronautical price increases that came into effect on 1st of July this year. The price setting disclosure docs show that throughout PSE4, Auckland Airport's aeronautical charges will remain very competitive with the main Australasian airports. Furthermore, the three regulated New Zealand airports, supported by our industry body, NZ Airports, have recently submitted comprehensive evidence that seriously questions the merits of the Commerce Commission's dramatic draft decision change in its approach for determining the airport sector WACC. The final bullet of this page summarizes our expert advisor's views on this draft decision, and I'd encourage you to read our hundreds of pages of submissions on the Commission's website if you wish to learn more. So, Carrie, let's open up the Q&A. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of Andy Bowley with Forsyth Barr. Thanks, operator, and good morning, guys. A couple of questions from me to kick things off here. First of all, on the retail side of things, good to see that things are, are coming back. Now, could you unwrap the retail piece, please, between PSR, so passenger spend rates and the concession yields, versus pre-COVID levels, excluding the, the rent abatements that have, been provided through FY 2023? I guess I recognize here the, the mix will have an impact, given the slow recovery in international versus domestic, in FY 2023 and, the lag recovery of, of Chinese inbound. But as much as you can, can you give us an indication of how these metrics are traveling on a like for like basis, please, versus pre-COVID? So PSR, I don't have that handy. Sorry, Andy. But on income per passenger, we've got the figure there. It's still below where we were pre-COVID, and we've been guiding for the last 12 months or so that we should expect as we emerge out of COVID, that total retail income per passenger is gonna be down somewhere between 15% - 20% on where it was pre-COVID. Duty free will be down sort of towards the top of that range and perhaps the rest of the portfolio towards the bottom end of that range. You can also get some clarity if you look at the abatements, that remaining figure. You should not assume that that gets recovered, that we claw that back in future. financial years, as we continue to renew and replace pre-COVID legacy lease arrangements, we're basically seeing minimum annual guarantee reductions coming through to the sort of levels I outlined there, 15% - 20%. Great. So, you know, in light of the comments, particularly around the new single duty-free operator, in terms of how they're traveling, I'd assume that the 15% - 20% is more concession yield, and as you just alluded to, MAGs than PSR. Yes. Yeah. When I looked- Okay. Last looked at PSR, it was getting close to pre-COVID levels, and I imagine it still is pretty close. Yeah. Okay. Second question around CapEx. The midpoint of the guidance range looks slightly light versus at least my expectations, in light of the disclosures last week. Now, could you give us a sense of what the guidance looks like if we split rather than your segmentals, but more so consistent with, say, last week, in terms of regulated versus non-regulated, given the allocation aspect of the non-aero pieces, please? Yeah. So the guidance is based off assuming that we deliver the aeronautical pricing forecast. For FY 2024, we have risk adjusted the non-aeronautical part of the portfolio. Now, how that actually plays out in practice remains to be seen, but we're comfortable in aggregate with that guidance. But it's, say, the 1.4, how much of that's regulated? So that's set out in the financial commentary to the financial statements. Let's see if I can find that quickly. Yeah, so you can get a breakdown of that from page 19 of the financial commentary. But that's not splitting out the allocation between the various non-aero parts, between regulated and non-regulated, is it? Is that how I'm reading that? Pretty much. Add aeronautical infrastructure together to get total aeronautical. That's probably what you're missing. Okay, fair enough. I'll leave it there. Thanks, thanks, Phil. Thank you. One moment, please, for our next question. Our next question comes from the line of Marcus Curley with UBS. Good morning, Phil and Carrie. Just a couple from me. Yeah, Phil, could you just clarify whether any of the COVID discounts on landing charges still exist, or will FY 2024 be a, you know, sort of back to normal year for landing charges? They're rolling off in FY 2024, but we're rolling in growth incentives that will pretty much offset or repeat the sort of dollar values that we've had in FY 2023. Yeah. Okay. So that's NZD 8 million of discounts effectively continuing in FY 2024? Yeah, that's landing charges discounts. There's also some passenger charges discounts. So, in round numbers, you should use a figure of circa NZD 10 million in total. You know, is that a new approach? Obviously, you've got your marketing spend as well. Yeah, it's just, I suppose I haven't come across, you know, I suppose in previous results, you know, as big a gap between headline charges and reported revenues. Yes, it, it is, pre-COVID over FY 2019, we rejigged the incentive program. We've had a lot of feedback from airlines that they didn't particularly value the marketing support that we've been provided and, and, and strongly favored, like they were seeing with, with airports right across the globe, that to flow through to aeronautical charges discounts. So we, we implemented a policy back then, and then COVID hit, so there weren't any discounts paid. So we've only kicked off the, the, the practice of having, having landing charges and passengers charges discounts in relation to the COVID recovery period, and then going forward with growth incentives. Would you recommend using, you know, NZD 10 million as a percentage of aeronautical revenues as sort of a, an ongoing guide? You know, so, you know, as, as the business grows, you know, that NZD 10 million will continue to expand? Yeah, I think that's a good ballpark way to go about it, Marcus. And on the flip side, you know, you wouldn't expect to see any material changes on the marketing from these levels, or what are you thinking in terms of marketing spend? Yeah, that's right. The aeronautical marketing is now a very low number, low single-digit NZD millions, versus it was well over NZD 10 million pre-COVID. Okay, great. You know, duty free retender, you know, no comments around that. Can you just give us an update in terms of, you know, your, your thinking there? ... Yeah, Marcus, it's certainly something that, that will kick off in earnest, early next year. So it—we, we are on track, that the mid-2025 is certainly what we're aiming for, and, and a lot of the preparatory work is underway. But as far as actually the RFP itself, it'll, it'll be early calendar 2024 before that, kind of rubber hits the road on that. The final one from me, you know, obviously the property reported revenue this year was relatively complicated relative to history. You know, I just wondered, Phil, whether you could provide any guidance in terms of what sort of the level of growth in that sort of total property revenue bucket would be in 2024? No, we don't guide to that level, but you're correct. There's property businesses across the world have been progressively adopting the straight lining of property rentals, where there's fixed annual increments. And what that means is you don't report in the P&L annual increments of revenue growth. In fact, you just add up total revenue over the term of the lease and divide it by the number of years to get an average. So the way that revenue growth shows up going forward is delivering new properties, as well as recycling existing properties, or that they come up for market reviews that materially change... move the dial. But the- But, yeah. The level of annual growth in rental income should normalize back to where it was more pre-COVID than what you're seeing. Well, over recent years, COVID didn't really impact it too much. And is, yeah, the current reported number, that is the new base? As I mentioned, just a smidgen under NZD 6 million of that will fall out next year. It was a one-off adjustment. 6 million. Okay, thank you. Thank you. One moment, please, for our next question. Our next question comes from the line of Wade Gardiner with Craigs Investment Partners. Hi there. Just to follow up on a couple of those retail and property questions. First of all, on the retail, NZD 58 million of abatement this year. I mean, I understand that that is relative to the old contracts, not the new contracts. What should we assume is gonna be in there for FY 2024, if anything? Next to nothing, Wade. We should have renegotiated the lion's share of the contracts by then. Right. So therefore, we just assume that 15% - 20% down in the MAGs? Yeah. Likewise, within the property, I think in the past, you've also, you know, within the aero part of the property revenue, you've also had rent abatement. Was there any in this, in this result? No, there wasn't. In FY22, there was 4.9 million. Okay. And on slide 30, you talked about the CapEx projects and, and so, you know, NZD 40 million of new rent from those projects. What's the timing of those being completed? There's a bit of variety on that, Wade. There's two more commercial properties that we are expecting to be completed in FY 2024, and circa 10 million on that space. But I don't have the other deliveries, they are post FY 2024, so I don't have those to hand. Okay. Yeah, that's all from me. Thanks. Thank you. One moment, please, for our next question. Our next question comes from the line of Grant Lowe with Jarden. Oh, hi, team. Can you hear me okay? Yes. We can. Oh, great. Yeah, just coming back to the CapEx guidance, the NZD 1 billion-NZD 1.4 billion. So if I look at the disclosures that you put out last week and the aeronautical CapEx, that looks to be, if I'm interpreting those right, that there looks to be circa NZD 900 million. So implies quite a big range on the balance, if we are indeed saying that the nine hundred is reasonably firm. Can you comment on that range and what the key sort of drivers are of that range, whether I've got that NZD 900 billion right? Yeah. So NZD 900 million is the top of the range, by the way. Got it. Then at the low end of the range, it's based on a different approach, where we're looking at our current run rate on CapEx delivery right across the entire portfolio and how that has been stepping up in recent months. Okay. So if I look at that NZD 900 million is the top of the range, that implies up to NZD 500 million on other projects, is that right? Yes. Can you give us sort of a rough breakdown of how that sort of builds up to the top end of that range? Yeah. So that's set out on page 19. So look at the top of the range, add aeronautical infrastructure together, which is basically aeronautical, and then we talk about property and retail and car parking. Right. Okay. And then just, sorry, my questions again. Then if we look at your comment, I think you mentioned that a run rate of NZD 100 - 200 million on top of aeronautical CapEx on the go forward when things normalize. Obviously next year it's gonna be materially higher than that. Can you give us an idea of when you think the NZD 100 million-NZD 200 million of non-aero CapEx starts to apply on? i.e., what's the profile down to that number? When does that hit? Yeah, I mean, you can regard that as a weighted average across the remaining nine years of PSE4 and PSE5, is probably a good way to look at that. Of course, a lot of those projects are yet to be even identified. So this is based on historical run rates. But it is somewhat higher at the moment 'cause we've got Mānawa Bay, so that's NZD 200 million-plus projects. We've got the transport hub, which is NZD 300 million-plus, two-thirds of that is non-aeronautical. And so that's elevating near-term CapEx. They'll be substantially complete over the next 12 months or so. Got it. Okay, thank you. I think that's everything for now. Thank you. One moment, please, for our next question. Our next question comes from the line of Rob Koh with Morgan Stanley. Hi, good morning. My first appearance on an Auckland call for a couple of years now. Thank you very much for the results. Can I ask a quick question of Mr. Neutze, just on the overall OpEx, kind of thoughts for FY 2024? You mentioned we should be looking for maybe 10% - 15% growth there. Is that versus the 2022 base that you talked about? No, versus total 228. Yeah. Okay, thank you. That's clear. And then my second question, going to the regulatory side, and I must apologize, I could only listen to the replay of your presentation from last week. But you did talk about how you're viewing the firm's overall cost of equity at around 3%, inferred from, you know, the observed cost from the share price. But I guess within PSE4, you're targeting a realized cost of equity of, you know, 8.08%, if I'm reading the preso correctly. And so I'm just wondering, how should we reconcile those two things? Surely you're not saying that your non-aero cost of equity is that much lower. No. So the way we've based it is, there's been a WACC Input Methodology that the commission has steadfastly insisted that regulated airports adhere to over the last 13 years. Has not been prepared to consider any different approach. And so we have applied that approach and updated all the data inputs into it, and that's the answer we get. Yeah. Okay, that makes sense. And then I guess just turning to the relationship with your airline partners and, you know, that they obviously have their views, but ultimately, passengers are still going in and out. Do you see any prospect of the disagreement widening? And I guess there's a precedent over here in Australia where a certain airline just stopped paying the landing charges to Perth Airport. And yeah, just any thoughts on how on the ground it's going? Hi, Rob. Listen, I think there's always... It's certainly, I've been in the airline game for well over 20 years, and the conversations and tensions, I guess, the natural tensions that come with the pricing conversations every five years. So it's not a surprising piece, but we actually also have very constructive and dialogue and engagement with the airlines. So there is the pricing conversation, but as far as ongoing relationship and engagement on things, it is very constructive. Yes, there are differing perspectives on this, and we'll work that through as we go in the next 12 months. Obviously, the timeline we'd outlined for the Commerce Commission's feedback on our pricing, which is due circa May next year, and then we've got the IM methodology. So I'm confident that we will be able to constructively work our way through it, but there's still, you know, some of the outcomes of, of those reviews underway as part of that. Okay. Sounds good, and all the best to the team in that endeavor. Thank you very much. Thanks, Rob. Thanks, Rob. One moment, please, for our next question. Our next question comes from the line of Nick Dash with RBC Capital Markets. Hi, Phil. Hi, Carrie. You can hear me clearly? We can. Great. Just a quick one on the CapEx. I suppose less is focused on the actual timing and quantum, more so just on how risk is allocated. My understanding is that whatever cost is eventually borne by Auckland Airport, the original cost or, you know, risk adjustments will eventually contribute to the RAB. But I just want to understand how the actual contracts themselves work between Auckland and its contractors, please. So we're certainly in a new era where with such large and complex construction projects, it's not possible to kick off the project with all elements being fixed priced. So as you progress with the contract, we progressively lock in a greater proportion. So I think with the domestic processor, we're starting off day one with about a third of the cost fixed, and over the next year or two, progressively getting to quite a high proportion fixed. Okay, cool. Thank you very much. And the second one is just around—you've mentioned a couple of times the possibility of an equity raise somewhere between nil and NZD 1 billion. I suppose the way I'm thinking about that equity, it's really a bridging mechanism between spending that cash on the build and then recouping the returns in PSE five. Is that a fair and reasonable way to think about a possible equity raise? And I guess the key question is really, should we anticipate, and I understand it's a long way down the track, should we anticipate whatever proceeds come of an equity raise would come back eventually to equity holders? Or is it something that Auckland Airport, do you think, would prefer to hang on to, without knowing what happens, you know, in five, 10 years time? So the last thing we want is an unwanted credit rating upgrade or downgrade. So if we undertook an equity raise to avoid a downgrade, we would equally take steps to avoid an upgrade in the future if the credit metrics got unreasonably high and the outlook was that they would continue to strengthen. That was the rationale for the capital return that we did back in 2014. I guess the key unknown in this is second runway. So, you know, this year, we'll be doing a lot of work on second runway timing. And that could potentially require us holding on to an equity raise that we might take place. We don't know that it will, but might take place to the ends of in the PSE four, if we expected to be getting cracking on early stages of second runway CapEx the next pricing period. But we won't be able to give any clarity on that until we complete that really detailed analysis to determine timing. Great. Thank you. Very clear. Thanks, guys. Thank you. One moment, please, for our next question. Our next question comes from the line of Roy Harrison with Bank of America. Hey, guys, thanks for taking my question. Just on the traffic mix, in the last couple of months, we've seen a lot, a big traffic improvement from mainland China. Are you expecting that to grow further going into FY 2024? And have you seen that kind of come through into the retail spend per pax at all? And are we expecting that to improve significantly in FY 2024? Cheers. What we've certainly seen is the relatively quick scaling up of capacity out of China. I said, by September this year, based on what we know, it's 93%, and we certainly continue to have positive dialogue with operators out of China. So we do see that remaining strong through FY 24. In regards to the capacity added, but actually the passenger number themselves, I'm not sure whether Phil's got any insight. Last time I'd looked at the data, we didn't necessarily have an overt call-out in the China space as far as the what we were seeing from the returns. It's still a wee bit early, 'cause whilst capacity came on earlier this year in kind of April, the lag of getting the load factors up has really only been in the last couple of months. But Phil, anything you want to add on that front? Yes, I think the question was, if I understood it correctly, specifically, are we seeing that increase in the proportion of Chinese pax starting to grow drive up retail income? Yeah. Not during FY 2023, particularly, because we did the transition to a single operator in May, and that caused quite a lot of disruption. So there's a bit of noise, and there has been for the last couple of months. So I haven't seen the most recent data. We would expect it to, because the trends pre-COVID was that Chinese direct arrivals, their spend was circa 2.5 times our overall average. So I just haven't looked at the data, but you would expect to be starting to see that come through. Thanks, guys. And then just on disruptions generally from the terminal integration, the domestic processor, just on the car parks, the number of spaces are down almost 40% due to construction disruptions. Are you expecting any disruptions in the retail side over the next, you know, five years? Well, we certainly, I mean, again, you if we look forward, for example, on car parking, you would see the kinda overs and unders as things like the transport hub come online, those will come back, Park and Ride South, et cetera. From a retail perspective, we had quite a bit of disruption that Phil just referred to as we moved to a single duty-free, so not expecting significant in the international space. Obviously, as we do move from the existing domestic terminal into the integrated terminal, but not expecting disruption there because we are going from an existing building into a new building. So from a domestic perspective, there will be new and additional retail, but we're not reliant on one overlapping the other. They can happen discretely. ... thanks, guys. That's all from me. Thank you. Thank you. One moment, please, for our next question. Our next question comes from the line of Alexander Prineas with Morningstar. Thank you, and thanks for the presentation. Just thinking about the, you know, airline and bringing on more capacity and the recovery that we've seen there and the outlook. Is there any sort of obvious, sort of single, big hurdles that you'd sort of highlight or comment on that is still preventing airlines from bringing on more capacity? Or is it really more just general economic conditions and, you know, solving general kind of logistics problems that the airlines are facing? Yeah, thanks. Good, good question. I think if we look backwards looking into FY 2023, I think, the industry generally, did struggle with resourcing capacity, you know, having enough, enough staff to turn aircraft, and that, that was across airlines, ground handlers. You know, you saw it at a system-based approach. All operators in the system are getting on top of that. Not quite when... Certainly when I engage with, with CEs across this business, and they're not back to exactly where they want to be as far as their total numbers, but they're getting much closer. So as far as capacity coming on, there, there should be, there shouldn't be a lot of limitations to the, the ability to facilitate that as the system is running. In particular, as you look at things such as the regional network versus domestic, and then you've got Trans-Tasman as well. So I'm not seeing a lot of constraints in that, other than the system itself continuing to scale up. And I mentioned earlier on the call, it's getting there, but we still have work to do as a system in regards to those, but those I'm confident we will overcome those in the short term. Okay, thanks for that. Thank you. One moment, please, for our next question. Our next question comes from the line of Jason Familton with ACC. Hi, good afternoon, guys. Just a couple from me. First one, how is Carrie, how's this leasing going for Mānawa Bay, given pretty subdued by economic conditions in New Zealand for retail at the moment? Yeah, actually, very, very well. It's- we've got 50% of the net lettable area leased already, which is unusual when you look as far as benchmarks of other shopping or outlet centers to be kinda 18 months out or so from opening to have that level of leasing actually is very positive and very strong. We continue to vet interest through it and agree with you. You know, you've got a global market that is softening a bit, but as far as the demand and interest, we're still seeing that as very strong and remain optimistic of us hitting obviously the tenancy that we're looking for prior to opening. Okay, thanks. And Phil, just, I'm just thinking about interest rate hedging at the moment, like, and plans around that, 'cause given uncertainty around CapEx and reasonably wide range, how are you thinking about the level of hedging you've got for interest rate risk and as that plays out over the next couple of years? Yeah. So while we were progressing the consultation on aeronautical pricing and the aeronautical infrastructure development plan, we had a policy position right at the bottom of our hedging policy at the various time buckets. So we are lifting that during this financial year. So certainly not to the middle of the bands, but we'll be putting in place circa NZD 1 billion of forward-starting hedges in relation to new borrowings not yet drawn down. Okay, and then linked to that, should we think about the capitalized interest component being pretty similar percentage in 2024 as what it's been in 2023? Yeah, I think that's a decent assumption, ballpark, Jason. Okay. And one final one, and I know it's probably being a bit cheeky, this one, but clearly, the larger or longer-term applications from what's in the Input Methodology review is for PSE5 and beyond. Like, how, how are you, how are you thinking about that and the regulatory return that you could generate in those periods? And I know we've still got to go through a consultation process, and it's just draft and things, but... And I guess the more important one is around the CapEx that you need to spend. Yeah. So, yeah, we've had- I think we had a question along similar lines last week, actually, on that. We've, we've disclosed, an aeronautical CapEx program of about NZD 6.7 billion over PSE4 and PSE5. About NZD 4 billion of that is to do with terminal integration, which we're getting cracking on. Once we're committed to that, that's, there's really no going back, so that's about NZD 4 billion. So it means about NZD 2.7 billion or so of the program is, is discretionary still, and it is, it's certainly likely, if the commission's draft decision was to be, finalized, that we would be looking very closely at that remaining program. ... Okay, thank you. And then one final one. This one is based in Wellington. What plans are there for funneling passengers from the new integrated domestic terminal to regional flights, which will remain at the old domestic terminal? Like a covered walkway, which should be quite useful given it rains in Auckland from time to time. Well, I have no idea what you're talking about. There's no rain in Auckland. No, certainly it is, we are working through what that looks like and very much the planning in terms of and very much need to engage and consult with airlines around everything from how they think about minimum connection times through to obviously how we get from one terminal to the other. And also ultimately, you would have seen tagged on the 10 year capital plan that the view of the future regional solution. So I haven't got the absolute, "This is what it is going to look like," but it is absolutely on our agenda and we are working through options and we'll be engaging with airlines on that as well, 'cause we do want it to be... You know, part of this exercise is that we're investing in infrastructure that's good for customers and that they do have customer experiences in line with their expectations. Great. Thank you. Thank you. I'll now hand the call back over for any closing remarks. Well, thank you. Just, I mean, in short summary, certainly I guess for me, we have seen a strong recovery in financial year 2023, and we are very optimistic about the continued growth in FY 2024 and beyond. You know, as the gateway to New Zealand, it's a role we take really seriously, and we are focused on delivering that customer experience that they expect and ensuring that we are fit for purpose for the future with the right capacity and the right resilience as we go forward. So thank you for your time today. We do, Phil and I, do look forward to catching up with many of you over the coming weeks as we have investor meetings online, both here and in Australia. So have a great afternoon. Ngā mihi.