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Operator: Good day, and thank you for standing by. Welcome to Auckland Airport Annual Results 2025. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, CEO, Carrie Hurihanganui. Please go ahead.
Carrie Hurihanganui:
Chief Executive: [Foreign Language] Welcome, and good morning. With me today is our Chief Financial Officer, Stewart Reynolds, and we are pleased to be able to share the financial results for the 12 months to 30 June 2025. Well, it's been a year of positive performance against what has been a backdrop of ongoing aircraft fleet challenges in the global aviation sector, growth constraints in the domestic aviation sector, and the subdued local economy. And with that, ongoing soft recovery in travel volumes delivering a modest uplift in our overall passenger numbers. Now as we've navigated through these challenges, we have remained focused on both prudent cost management and delivering the resilient and fit-for-purpose gateway that New Zealand needs with 18.7 million travelers and more than $33 billion in high-value airfreight last year, our infrastructure program is a critical investment, delivering nationally significant assets that will have decades of ongoing use and deliver the uplift in the experience travelers are seeking. FY '25 has seen us continue our positive momentum on our infrastructure program with over 1,500 people already working on sites across the precinct. Alongside that, our investment property portfolio has maintained its strength with the completion of key projects in year and continued developments in the pipeline. As always, there is a lot to cover today, so we're going to get straight into it and move to Slide 4. It's been a year of strong and steady progress against that backdrop of modest passenger growth that I referred to before. Total passenger movements were up 1.1% on the prior year to 18.7 million with international up 2.5% to 10.3 million, including transits. However, domestic was down 0.5% to 8.4 million. Full year revenue increased by 12% from the prior year to just over $1 billion, reflecting increased passenger numbers in aeronautical charges combined with growth across commercial and interest income. Operating EBITDAFI of $701 million is up 14% on prior year, seeing an EBITDAFI margin of 69.8%, up from the 68.6% in the prior year. Reported profit after tax was up significantly to $420.7 million, and this is a result of investment in property fair value changes and no repeat of last year's tax charges relating to changes in government policy and depreciation of building structures. The net underlying profit after tax sees an uplift of 12% from the prior year to $310.4 million. And a final dividend of $0.07 per share will be paid on the October 3, and this will see total dividends for FY '25 equating to just over 71.8% payout of underlying profit after tax. Capital expenditure momentum continued in the prior year at just under $1.1 billion, made up of $878 million of aeronautical capital and $212 million of commercial infrastructure and other capital. If we move to Slide 5. We are continuing to deliver our strategy to build a better future with both tangible and positive progress against our 5 value pillars that you see outlined on that slide. We have ongoing customer commercial capacity, construction and community initiatives well underway. You'll see some of the examples called out on the slide, and we will touch on these later in the presentation. Jumping to Slide 7. Now aviation connectivity, I think we all agree that, that is critical to New Zealand achieving its economic growth ambitions, and we have worked incredibly hard to bring back international airlines to Auckland and grow capacity and along with it, opportunities for tourism, travel and trade. International airlines do have to continue to prioritize their available fleet in the short term, but we certainly are focused on ensuring we are well positioned for growth, and that has been boosted by several airline partners announcing new routes and expanded capacity for the upcoming summer. And a standout in this space force has been China Eastern announcing its connection between Shanghai through Auckland to Buenos Aires launching in December this year, something that we have been working on for a number of years, and it will provide an important connection between China and South America for travel and trade. Moving to Slide 8. 27 airlines are flying to 42 destinations, to and from Auckland Airport in the 2025 financial year. Saw international airline seat capacity stabilized at 92% of 2019 levels. So clearly, recovering and growing airline seat capacity remains 1 of our top priorities. We continue to work to connect international airlines to Auckland through supporting them to grow and relaunch services and ultimately deliver more choice for customers. We do remain confident that travel will continue to recover with ongoing positive feedback from international airlines about New Zealand's desirability as a destination and the very strong outbound travel demand from Kiwis. Jumping to Slide 9. The ongoing global backlog of replacement fleet orders that we have seen over the last year or 2 has seen airlines prioritizing their available fleet on higher-yielding routes rather than necessarily a full return to all previous long-haul destinations. And as a result, we have seen overall international capacity reduced year-on-year by 2.2%, primarily driven by North America that you can see there, but demand does continue to grow with passenger numbers up 2.5%, resulting in load factors up 3.8 percentage points. Slide 10. International passenger growth, I talked before about the strong load factors, with passenger movements recovered to 89% of 2019 levels and 88% of the capacity, that has seen a 2% year-on-year lift for inbound tourism to 84%. Over the summer, we saw more New Zealanders head off on short-haul international trips than ever before, setting a record in January of this year for resident travel arrivals. The more than 300,000 visitors from the United States make it Auckland Airport second largest source of international visitors behind Australia. And we also saw an encouraging increase in passengers visiting from across the Tasman during the year. You might recall last year, we did talk about that gap. With Australia, that is now over 782,000 passengers, which is up 9% on the previous year. And finally, visitor numbers from China continued to rebound with the trend emerging of smaller groups of premium travelers staying for longer. Overall, there were around 210,000 visitors from China, an 8% increase from FY '24. Slide 11. When we turn our attention then to domestic, it has been another challenging year in the domestic market with constrained airline capacity and we are seeing that recovery lagging major peers in New Zealand and Australia. A highlight, however, in the year was Jetstar growing its capacity by 14% but overall, capacity remains steady, affected by Air New Zealand's well documented and ongoing engine issues and fleet constraints and the overall economic environment. Slide 12. FY '24, we were really pleased actually it marked a strong year for customer experience improvements. Enhancements in infrastructure, digital technology and airport operations boosted resilience and delivered improvements in the experience supported by strong collaboration between Auckland Airport operations, border agencies, aviation security, airlines and ground handlers. And a good example of this is the improvements we've seen in the international arrivals with median processing time of 15 minutes in June 2025, which is an 8% improvement in the same period a year ago. Now these tangible improvements were also recognized in the Kantar Corporate Reputation Index, with Auckland Airport ranking as New Zealand's ninth most trusted company, the airport's highest placement ever. It was also pleasing for Auckland Airport to be named fourth for the best airport in the world in the 10 million to 20 million annual passengers category in the Skytrax's 2025 Global Airport Satisfaction Awards. We have more to do and we acknowledge that, but we are confident that we are on the right track. I'm going to hand over to Stewart now to take us through an overview of some commercial performance before coming back to expand further on how we're progressing against our strategy. Stewart?
Stewart Leslie Reynolds: Thank you, Carrie, and good morning, everyone. Turning to Page 13 of the presentation, where we have summarized what has been a big year for our retail team. Against the backdrop of a subdued local economy, we've been pleased with how our retail performance has undergone this year. Across the entire business, the increase in passenger numbers continued to flow into retail activity with transactional data indicating that excluding foreign exchange transactions, retail transactions actually outpaced tax growth in the year. In addition to the increased volume of activity, it has also been a busy one in terms of concessions with almost 10% of concessions replaced during the year as part of the ongoing focus to refresh and update our retail proposition. This has included adding exciting new retail brands such as Soul Origin, [ AG Express ], Rip Curl, Boh Runga and Tost, ensuring our retail precinct remains fresh for customers when they visit the airport. As I indicated at the time of the interims, the travel FX market remains challenged, and we've continued to see this in the second half of the financial year. And this challenge has occurred because of the digital developments as passengers opt for alternatives such as digital wallets. Following a competitive tender in the period, we have put a new operator in place for foreign exchange focused on optimizing walk-up demand and a competitive online offerings to activate sales in this category. Through better retailing, we've seen retail income per PAX increase in the year with income per PAX for the core terminal retail categories. That is excluding FX, our collection point and lounge offerings, et cetera, has actually increased by 7% from the prior year but is still 13% lower than what it was in FY '19. Similarly, excluding FX and these other categories, PSR has increased 8% versus the prior year and increased by 7% versus FY '19. Notwithstanding this, due to the significant impact of FX, we are seeing the overall PSR for retail decreased by 9% on last year, and income per passenger only increased by 1% when this is included. FY '25 saw a strong year-on-year performance in the key duty-free and food and beverage categories. Within duty-free, we've seen improved retail performance as a result of a combination of a broader product range, product bundling and promotional activity. What we saw was promotional activity not only driving category sales but it also had the halo effect of improving sales in other duty-free categories as well. Near the end of the year, a Lux for less category was also introduced as part of the broader offering, this category appeals to a wider range of customers such as those who may normally purchase at lower price points. The combined effects of these activities saw duty- free sales rise 16% on the prior year. With the commencement of the new duty-free contract on the 1st of July, the focus now shifts to further reinvigoration of this category. As part of the strategy, new brands and SKUs will be added as well as a phased refurbishment of stores beginning in late 2025, including a major redesign of the departures experience, purpose built for a single operator. This redesign is still under development and includes some exciting concepts, tasting bars and more customer engagement displays that will optimize the foot traffic layout. More of this will be revealed in the coming months. Separately, we also saw some strong performance in our food and beverage category, with sales tracking 7% higher than the prior year and well above PAX growth, benefiting from food court refurbishments and new service offerings. We have introduced some first to New Zealand offerings such as Soul Origin, as well as a new Asian food operators that have contributed to increased sales. Looking ahead to FY '26, it will be another busy year for retail with further developments in the international food court and terminals and a full trading year of duty-free, plus watch the space regarding new concessions. Now if we turn the page now to Page 14, it has also been quite an exciting year for our parking business. Following the significant investment in capacity in recent years associated with Park & Ride South and more recently, the Transport Hub, these have combined with the rise in international passenger numbers in the year, driving performance in our parking business, up 9% on the prior period. For those of you who have used the Transport Hub, you will know it provides a fantastic parking experience proximate to the terminal precinct and we're seeing that in customer feedback. By the end of the financial year, over 470,000 exits were recorded utilizing the Transport Hub and over 2/3 of short-stay customers are now using this convenient location. Very pleasingly, occupancy in the Transport Hub has grown steadily since it opened back in November last year. And in June, even reached close to 100% on key days in the long-stay car parks on the upper floors. This new facility alongside the other complementary international parking options saw international exits rise over 5% in the year, ahead of international PAX growth of 3% and showing our strategy to get people back to parking has worked with fantastic promotions like 7 days for $79. Importantly, as we start to pull back on these promotions, we're seeing the demand for parking remaining sticky. As mentioned at the interims, we continue to see weakness in the domestic parking business with exits down 7% on the prior year, reflecting the ongoing weak corporate segment and the challenging domestic economy. Finally, alongside improving the physical space, you'll recall that we've been looking at the customer journey and removing points of friction throughout our business and parking is no exception. The license plate recognition rollout across a number of our car parks is providing customers with a convenient ticketless access to the parking solutions, whilst also improving flow and our ability to analyze individual car park performance. Now turning to Page 15, where I'm pleased to report that commercial property business continues to provide strong rental growth and revenue diversification for the airport. With the completion of new assets in the period, growth in the existing portfolio and new development activity, it's for our commercial property business go from strength to strength, with rent roll increasing 18% in the year to $192 million. Ongoing rent reviews and the impact of decreasing interest rates throughout 2025, on cap rates led to an increase in the investment property valuation to $3.4 billion at year-end. Whilst the commercial property market in Auckland remains subdued, the team's commitment to developing world-class facilities is reflected in occupancy rates of over 99% and a weighted average lease term of almost 9 years, 1 of the longest amongst its peers, and provides a diverse source of stable inflation-linked income to our business. Manawa Bay has set the benchmark for premium outlet shopping in New Zealand with the introduction of first to New Zealand brands such as HOKA, GES, Gant, Ariat and Lindt, as well as having iconic global brands such as Michael Kors, Kate Spade and Sporsky. Through third-party research throughout the year, we've seen Manawa Bay take substantial market share in the segment, and importantly, maintain this post the first few months of opening. Footfall has exceeded our expectations with sales also above plan. Manawa Bay's offering of luxury and everyday brand offerings continued targeted marketing and new brand offerings continue to provide a bright point for the current domestic retail market. Finally, on the cargo side, we were pleased to report progress in the year on the creation of a new cargo precinct with airside access opening later this calendar year. To date, Swissport has established a presence in the facility with both Menzies and New Zealand Post relocating by calendar year-end, and we continue to work with Air New Zealand to finalize arrangements for their development as part of this precinct. Turning to Page 16 and reflecting on the success of commercial property business. A couple of weeks ago, we were delighted to announce partnering with Foodstuffs North Island to develop a new chilled and frozen distribution center. Set to complete in late 2027, the facility will spend 28,000 square meters with space for over 27,000 pallets and featured 27 state-of-the-art loading docks. The initial lease term is 25 years, and the building will incorporate sustainable design features and target a 5-star green rating. This development continues our long-standing partnership that Auckland Airport has with food stuffs and further anchors our income in the domestic economy, providing important diversification against aeronautical risk. Now turning over the page to Page 17. The hotel portfolio has also seen improvement in the year, and is currently outperforming the wider market. Following the opening of the Pullman Hotel midway through the previous financial year, there have been over 780 rooms available across the precinct throughout the current year. The ibis Hotel, which originally opened back in 2011, continued to perform strongly throughout the year. And whilst occupancy fell slightly, the average daily rate continued to grow in a very soft Auckland hotel market. With the hotel about to turn 15 later this month, our refurbishment will take place during FY '26 in a progressive manner to minimize the impact during the peak summer trading period, whilst importantly, providing an important upgrade to the facility. The works to the hotel will include a reconfiguration of rooms and upgrades to bathrooms to ensure it remains the first choice for travelers in this segment. The 2 hotels situated in close proximity to the international terminal here at the airport, both 50-50 joint ventures between the airport and Tainui Group Holdings also continued to resonate strongly with passengers during the year. And Novatel continue to trade very successfully and recorded an increase in occupancy in the year, while the average daily rate fell around 6%, a smaller drop than what was seen against its peer set. Pleasingly, the Pullman has continued to grow its occupancy throughout the last 6 months of this year, with average occupancy up 10 percentage points half-on-half to over 71%. And now consistently trades through that 70% threshold. With customer feedback continuing to be very positive, we are very confident in the hotel's outlook. I will now hand back to Carrie.
Carrie Hurihanganui:
Chief Executive: Thanks, Stewart. On Slide 18 now, Auckland Airport is focused on ensuring that we are driving the right infrastructure at the right time and in the right place to support the long-term growth of Auckland and New Zealand. In the last financial year, we carried out consultation on our draft master plan, which was the first major update to this key planning document in more than a decade. Strong interest meetings with more than 100 stakeholders together feedback and a final version of the plan is due to be released at the end of this calendar year. It was also a year of real momentum across the infrastructure program and the transformation of the wider precinct, strengthening the resilience of our operations, attracting new businesses, supporting hundreds of new jobs and significantly enhancing the customer experience. Slide 19. If we jump to terminal integration, we've talked before about how it will transform the future traveler experience. When it opens in 2029, the new integrated terminal will provide a 26% uplift in domestic seat capacity with a further 10% capacity in dedicated bus lounges and the ability to handle 44% more departing passengers per hour than the current terminal due to increased space for security screening. Not only that, it will also enable seamless connection under the same roof between domestic and international jet flights and support efficient airline operations. All of this means great outcomes for travelers. If we move to the next slide, we've been really pleased with the continued significant progress during the financial year towards the new domestic jet terminal with almost 450 piles installed more than 1,700 tonnes of structural steel and 5,100 cubic meters of concrete poured to date, the project is proceeding at pace and 2 program and is now over 35% complete. Moving to the next slide. We also made great progress in the year with key enabling projects, such as the 250,000 square meters of international air field expansion, which is set to open early in quarter 4 of this calendar year. It's made up of more than 3,700 individual concrete slabs and will create the essential airfield headroom needed for aircraft parking with extra taxi ways and 6 remote stands, which will allow for the construction of the domestic jet peer and apron. And it is also providing the critical stormwater resilience upgrades that we've talked about previously. On the next slide, there were several key milestones that were achieved in the financial year towards the multiyear infrastructure delivery program. In September 2024, we signed the contract with Downer Group subsidiary Hawkins Limited, to manage construction and delivery of the domestic jet terminal. In November last year, the Transport Hub became fully operational, and traveler is heading for the international terminal now experience a modern and fit-for-purpose facility when they pull up to the new undercover curbside drop-off and pickup area. Since being fully commissioned, customer feedback on the facility has been consistently positive, highlighting the standard to which the precinct transformation will be delivered. Then we jump to June 2025. We marked the completion of significant improvements at the western end of the international terminal, delivering a new loading dock and expanded international arrivals hall, a new nonpassenger screening point and a new purpose-built baggage tracing unit to support passengers needing assistance with lost luggage. Now these facilities will strengthen border processing, improved logistics and operational efficiency and provide better workspaces for the people working at Auckland Airport. If we look ahead on that time line, we're also now underway with an expansion to the regional air field that will improve operational resilience, adding 4 new regional aircraft stands. Next slide, please. Sustainability. It's something that remains central to our investment program with key milestones also achieved in FY '25. We completed a program to lay 3.5 kilometers of pipes to capture stormwater flows for more than 100 hectares of land north of the international terminal. These pipes measuring up to 2 meters and diameters direct stormwater into an innovative treatment system new to New Zealand, which can treat up to 3x the volume of water compared to traditional stormwater ponds, and that project completed in July this year. Auckland Airport is now also generating its own energy with 2 major solar arrays now supplying energy on the airport precinct from the 1.2 megawatt rooftop solar array on the Transport Hub and the 2.3-megawatt array at Manawa Bay, which also happened to open New Zealand's first fully electric food court in the financial year. Next slide, please. Now in March this year, we received the Commerce Commission's final report into our price setting event for, it did confirm that Auckland Airport's infrastructure investment program was reasonable, benchmarked well internationally, had cost rigor applied to it and was properly consulted on. Now following that report, Auckland Airport discounted airline charges for the final 2 years of PSE4, bringing the targeted return for the FY '23 to '27 pricing period to 7.82% and within the range, the commission found to be reasonable. In April this year, the Ministry for Business Innovation and Employment or MBIE asked the industry for viewpoints on the effectiveness of airport regulation under the Commerce Act and after receiving submissions in August, MBIE confirmed no legislative reform was being pursued at this time. And Auckland Airport actually supports those findings at the current legislative framework provides the Commerce Commission with the ability to amend the information disclosure regime to provide further insights of major capital investments. Finally, the input methodology merits review appeal was heard at the High Court in July this year. Airlines have filed for a judicial review of the IM determination with a hearing due in September of this year. And the High Court ruling on both of these is anticipated to be in early 2026. Now we all love numbers, Stewart. Why don't I hand over to you, we can get into some of these numbers in more detail.
Stewart Leslie Reynolds: Thank you, Carrie. Turning to Page 26, where we've outlined once again a summary profit and loss for the year. As Carrie mentioned earlier, we are pleased to report a positive financial result for the year ended June. Revenue grew 12% to just over $1 billion from passenger volume lift, higher aeronautical charges and the benefits of increased commercial development in the year, outpacing expense growth of 8% in the period. This combined to deliver importantly, EBIT margin improvement to 70%. And I will touch on these further in the coming slides. But before I do, looking below the line, Auckland Airport's total share of profits from associates in the year was $3.4 million, reflecting another strong result from Queenstown Airport and the improved performance outlined earlier across our hotel portfolio. Alongside the growth in revenue and EBITDA, we've seen a significant increase in the depreciation expense in the year, up just over $32 million year-on-year, driven by new assets commissioned, accelerated depreciation for assets whose lives are being shortened as part of the infrastructure upgrade and the impact of higher depreciation arising from the revaluations that were undertaken in FY '24. Tax expense in the year has fallen significantly as the prior year was impacted by the change in government policy on depreciation for building structures. With reported profit of $420 million, benefiting significantly from the investment property fair value change, which once removed and that of the government tax policy change, underlying profit grew 12% in the period to just over $310 million, a growth in line with what we saw in revenue. Over the page to Slide 27, we've laid out here a breakdown of revenue across the different lines of business. As can be seen on this page, the increase in aeronautical activity mentioned earlier and the higher aeronautical charges arising from the investment that's been underway for some time in the precinct have resulted in total aeronautical revenue up 15% in the year to a combined $491 million. Despite the 0.5 percentage point reduction in aircraft movements in the period to 157,000 movements, passenger movements actually rose just over 1% in the period to 18.7 million with international passenger movements driving this overall increase. The rise in higher-earning international travelers combined with the uplift in the aeronautical charges, delivered a passenger service charge income increase of 15% to just over $278 million in the period. In addition to driving aeronautical revenue growth, the increase in international passenger activity also contributed to improved performance across our commercial lines of business, with retail and car parking as well as hotels up, respectively. Retail income grew 3% in the period to $189 million, resulting from the increase in international travelers combined with an enhanced income per passenger that I touched on earlier, despite headwinds with the foreign exchange category, in particular, and what we saw with consumers shifting their spend to lower price point categories in the period. Increased public parking capacity up just over 2,180 spaces, saw revenue grow 9% in our transport business to just over $72 million with the second half showing a 12% growth, despite ongoing domestic demand challenges resulting from the subdued economic environment, and reduced business travel, particularly to Wellington. As mentioned earlier, investment property rental income grew significantly and was a strong performer in the year, growing 15% in the period to $173 million, driven by a combination of newly completed developments in the period, the full year contribution of developments in the prior year and rental growth from the existing portfolio. Auckland Airport also booked a $4 million of income in the year associated with the insurance proceeds from our January 2023 floating event, well down on the $19 million booked in FY '24. Now excluding the interest income, revenue increased 11% year-on-year compared with the 12% growth once the interest proceeds are included. Turning the page to Page 28. Auckland Airport has continued its focus in the year to invest in enhancing the passenger experience right across the precinct, reflecting the increase in both aviation activity and also the commercial and construction activity in the period. Operating expenses rose 8% year-on-year. Cost management remained a key focus for the team throughout the year and we're pleased to have kept expenses broadly flat across the last 3 6-month periods at approximately $150 million. During the year, we established our Match Fit program to drive improvements across both income and expenditure through simplifying our business, leading efficiencies through digital prioritization of discretionary spend and enhancing procurement. The program delivered benefits in excess of 8% of our cost base or over $25 million in the year enabling us to absorb some inflation seen elsewhere in the business, together with enabling us to invest in other parts of the business to support growth. As you can see on Slide 44 in the appendix to the presentation, our cost growth has been driven by the retail and car parking as well as property operating segments of our business with our aeronautical segments seeing the benefit of our match-fit initiatives. This will be something very important for our airline stakeholders. Looking at the breakdown of costs by category. Staff costs increased by $8.2 million or 11% in the period, as the full-time equivalent employees at Auckland Airport rose 13% in the year to just over 740 employees. This compares to 655 the prior year. The increase in headcount reflects additional resourcing to manage airport operations during the ongoing investment program and the in-sourcing of roles in the digital function to reduce cost. Asset management, maintenance and airport operation expenses increased by $17.5 million in the year or 15%. This increase reflects the scaling up of activity-based costs such as outsourced operations, including baggage handling, bus services, parking and lounge operations to support the ongoing investment program, the launch of new commercial lines of business such as Manawa Bay and the Transport Hub, but also to improve and manage the customer service during the periods of disruption. This category also included an increase in our PFAS remediation provision by $3 million in the period. Rates and insurance expenses increased by close to $6 million,, or 16%, reflecting higher counsel and insurance costs that reflect also a larger asset base. Expenses relating to professional services and levies decreased by $3.5 million to $8.2 million, reflecting a prudent approach to cost management with investments directed at driving improvements in operating processes and customer experience. Flood-related expenses of $3.1 million were incurred in the year in relation to the January flooding event. And other expenses increased by $5.3 million, primarily reflecting one-off SaaS charge that was incurred as part of the upgrade of several key aeronautical systems. As I mentioned earlier, depreciation rose $23 million or 19% to $201 million in the period, reflecting a substantial amount of new assets commissioned, the full year effect of assets commissioned in prior years and the increase in book value of assets as a result of the revaluations of the building and services asset class in June of the prior year. In addition, accelerated depreciation of close to $12 million occurred in the year associated with a reduction to the useful life of assets due to the decommissioning required to facilitate the build of new infrastructure. As we turn the page to Page 29, where we've outlined a bridge in underlying profit between FY '24 and this year. As you can see from the chart, the increase in aeronautical activity in the period, together with contributions from the commercial activities, helped drive an increase in underlying revenue in the business, up just over $70 million in the year. This improvement was partially offset by additional depreciation associated with the investment in infrastructure, the accelerated depreciation I talked about earlier and the higher operating costs touched on to provide a high level of service that support our commercial lines of business. As mentioned in the prior year results, the increase in tax reflects the higher effective tax rate in the year following the change in depreciation on building structures. And finally, higher interest income, partly offset by the one-off costs helped contribute to the 12% lift in underlying profit we talked about earlier. Over the page to Page 30. The increase in aeronautical activity alongside the commercial growth drove an improvement in operating cash flows before interest and tax to $623 million in the year, up over $30 million from the prior year. As can be seen from the chart, the significant investment in infrastructure and new commercial lines of business totaling over $1 billion in the period was funded in part by these higher operating cash flows but also the proceeds from the $1.4 billion equity raise undertaken in the first half of the financial year. With significant cash reserves, management took the opportunity in the year to repay borrowings, reducing debt by over $240 million where it was seen as prudent to do so. Over the page to Page 31. FY '25 was another pivotal year in the company's investment program, with almost $1.1 billion of capital expenditure in the year, spanning both aeronautical and commercial investment. For those of you who have been following the airport for a few years, you'll recall airlines lobbying for more investment. While you will see from the chart on the right-hand side of this page, Auckland Airport is now well into its investment program, upgrading critical infrastructure for the gateway to our country. This investment incurred right across the precinct with the majority of spend on Aeronautical upgrades, including terminal integration, airfield works, a series of related infrastructure programs, including utility, roading and importantly, digital system upgrades as well as complementing this, the airport continued to invest in a range of commercial projects, which I touched on earlier. And finally, before I hand back to Carrie. On Page 32, we outline our credit metrics. On this page, you'll see that despite the significant capital expenditure in the period, reflecting the capital management initiatives undertaken, Auckland Airport maintains a strong liquidity position and robust credit metrics. Total drawn debt at 30 June amounts to circa $2.5 billion with undrawn bank facility headroom of just over $350 million and cash in the bank of $560 million. Post-balance date, Auckland Airport has put in place additional bank facilities of $650 million, providing additional liquidity support for its investment program and in the next 6 months, anticipates looking at further debt issues. At 31 -- at 30 June, Auckland Airport's key credit metrics remain strong with its FFO interest cover and FFO to net debt on a spot basis remaining well above their respective tests. Auckland Airport has declared a final dividend of $0.07 per share and equates to a payout ratio of close to 72%, continuing the company's capital setting of paying at the bottom of this dividend policy range. With that, I'll now hand back to Carrie to take us through the outlook.
Carrie Hurihanganui:
Chief Executive: Thanks, Stewart. We are on Slide 34 now. And certainly, we remain focused from our outlook perspective on delivering to our strategy, which is building a better future and that includes the continued growth of our aeronautical network and the quality of our commercial offerings across the precinct. We're focused on the enhancement of the customer experience in both the short and the long term. We are investing in the critical infrastructure that underpins headroom for capacity growth and future resilience and that is in line with our master plan, and we are deepening our links with our community and people. So if we jump to the next slide. As we look forward to the 2026 financial year, we are pleased to see the ongoing demand for air travel and the continued growth in our commercial products and services. We do see, however, the ongoing airline seat capacity constraints are expected to continue in the short term. And alongside this, there is a global geopolitical environment that we are uncertain in terms of its impact on travel demand. We have the softer New Zealand economy. And as a business, we are needing to adjust in -- operating in a live and, dare I say, ever- increasing construction environment as we get to the point end of things like integrating the terminals and all of those create a level of uncertainty in that outlook. And so reflecting that, we are providing underlying earnings guidance for the year ahead between $200 million (sic) [ $280 million ] and $320 million. And this is based on both the anticipated domestic and international passenger numbers of 8.6 million and 10.6 million, respectively, together with the higher depreciation as a result of the investment program. And from a capital perspective, with the ongoing significant investment across the precinct, we are also providing a guidance on capital expenditure of between $1 billion and $1.3 billion for the year. And as always, this guidance is based on the current expectations on the operating outlook and prevailing market conditions and is subject to unforeseen events as part of that. But let's, at this stage, open it up to questions, I'm sure there will be a few.
Operator: [Operator Instructions] Our first question comes from Andy Bowley from Forsyth Barr.
Andrew James Bowley: Now first question is around that outlook guidance. So the NPAT range, $280 million to $320 million, can you give us a sense of what that translates to from an EBITDA point of view? I'm conscious that impact from an investor's perspective is becoming kind of less useful in the context of how the P&L is being reshaped by various line items, which are becoming quite material.
Stewart Leslie Reynolds: Andy, why don't -- I'll take that. And I'm conscious we don't want to create another reference point for guidance, but to help sort of answer your question, we are not uncomfortable with market consensus when it comes to below-the-line items. So when you aggregate all of those, I think you can effectively add that to our underlying profit guidance and we're not then uncomfortable with what EBITDA for you would look like.
Andrew James Bowley: So maybe just digging into a couple of those numbers then. Depreciation, what kind of uplift that you're thinking about, just to make sure we're clear what kind of consensus you're looking at?
Stewart Leslie Reynolds: Andy, I don't want to be drawn on exact forecast for depreciation nor interest for the next year. So if you look at market consensus and bucket those 2 together, then I'm comfortable with that. And if you look at that market consensus from what we see, together those categories add to sort of circa $300 million.
Andrew James Bowley: Brilliant. That's helpful. The second question I've got is digging into the retail income line. Now there's a fair few things going on when we're talking about PSR and retail income per PAX, et cetera, and I appreciate you referenced the impact of ForEx in the full year, which clearly had a significant negative impact on PSR. Now if I go back to the first half presentation, PSR was pretty steady on the prior year. So it appears that ForEx issue is very much a second half issue. So I guess the question here is, could you talk in a bit more detail about how that unfolded and what it means from a concession yield perspective and how we should be thinking about retail income over the next 2 to 3 years?
Stewart Leslie Reynolds: Yes. So Andy, look, I think that's a good summary. And so that ForEx issue, I think the business was trading hard during the first 6 months of the period, but what we saw is the position substantially deteriorate during the second 6 months of the financial year. That then also combined with what I mentioned in terms of consumers moving off sort of the luxury categories as well, together they sort of combined to drive down that PSR in the second half. And so what we saw was then a swap out of the FX provided during the back part of the second 6 months. And so you end up with not an operator for a small period or in the final months of that, that you get a disproportionate impact from adverse trading.
Andrew James Bowley: And then on a go-forward basis, how do you think we should be thinking about retail income? And I'm kind of conscious around disruption that is likely to be a feature through this financial year in light of the refurbishment. But what's incorporated into your thinking, particularly, say, around guidance around retail income because of the various movements that are taking shape in that retail space at the moment?
Carrie Hurihanganui:
Chief Executive: And Andy, I might kick off and then Stewart will talk about that forward. Look, I mean, we do know with the appointment of Lagardere kicking off from the 1st of July this year. And Stewart alluded to it in his summary in the presentation that there will be redesign and refits and things happening. Now of course, we'll do everything we can to minimize that impact, but it is common that when you are doing those, you do see an element during that period, but we are going to very consciously manage it. But Stewart, in terms of the look ahead for the year knowing that we kind of have 9 to 12 months of redesign and refit along with the airport?
Stewart Leslie Reynolds: Yes. So I think, Andy, what I would sort of encourage you to think about is that there will be a disruption once that work continues because we will be reconfiguring, particularly if we sort of focus in on the departure outbound in the international terminal there, a store layout that was really built for 2 operators, and we're going to reconfigure that to one that's purpose-built for a single operator. We will progressively undertake that during the sort of second 6 months. So you should expect reduction in retail income during that period. But once that process is complete, we'd like to see then retail performance in the first 12 months post the completion of that back on where it was in the current year. And so it's difficult to put a number on what that disruption will look like because I think there's a combination of factors in there, including consumer trends as well. But I'd like to think within a year, we're back to where we were.
Andrew James Bowley: And just to clarify, Carrie made the comment there 9 to 12 months refurbishment disruption. So this is kind of a calendar '26-type refurbishment time frame and it should be completed by the end of next calendar year, is that what the message is?
Carrie Hurihanganui:
Chief Executive: That's what the plan is. I mean the design and those things are still being finalized, but that's -- at this point, that's what we're targeting. We'd like to maintain kind of any disruption in the year, if we can, that's what the target is.
Operator: Next question comes from Rob Koh from Morgan Stanley.
Robert Koh: May I just ask a question on the aero side. I guess there's lots of routes, and I know it's not the whole picture, but obviously, the U.S. routes are the ones suffering. Do you have any feedback from your airline partners on forward capacity there? And if you're looking at, I guess, offsetting that with other routes, can you share any color on your willingness to enter into discounts and incentive plans with airline partners, please?
Carrie Hurihanganui:
Chief Executive: Absolutely, Rob. I think what we have seen is some of the year-on-year change was that, you would have seen there was that, you might recall, kind of enormous surge actually in FY '24. I can't remember, but we were something like 112% or 114% of 2019 capacity into FY '24. Now after a year of operating, you hit a little bit of a normalization out of the U.S. I think at 1 point, we had 5 -- 4 or 5 carriers. So that's normalized, a little bit more seasonality, but messaging we're getting out of them is that it has normalized. So they are happy with kind of this past year and how they performed, albeit down a little bit on '24, still up on '19. That being one. I think on the other hand, if we look recently, we had the announcement of Qantas lifting their New York service to daily in 2026. So there is still -- North America is strong and performing well, but I would define that as normalization. I guess, to the rest of your question around other routes, we are -- we remain positive around that the demand is there. We do acknowledge that there is the capacity challenges with some of the global fleet issues. But if we look standouts for us, obviously, was the China Eastern announcement to kick off in December going through to South America. It was great. This year, China Southern kicked off in July this year, for example, it's first dedicated freighter with 3 times a week services from Guangzhou to Auckland and Sydney. Normally, air freights in the belly hold were passenger aircraft. They are seeing demand on the cargo space to dedicate a freighter. Again, we've had other announcements around Perth flying, Perth-Auckland, Adelaide-Auckland out of Qantas as well as an uptick on the 3 -- the East Coast of Australia. So we are seeing that continued growth. We will also -- that it's an always-on posture, I guess I would say our aeronautical team continues to go out globally and chase that capacity growth. We've made no secret of the fact that we would love to get a direct connection with India. Obviously, the Prime Minister's visit there, there was the announcement with Air New Zealand and Air India. We're also in market talking to airlines just to understand those opportunities because there's a 300,000-plus number of residents that live in New Zealand between an international schooling. So there's a great opportunity there. So we will keep chasing. But hopefully, that's answered your question on North America. In terms of what we do to support them. We do provide on new routes, in particular, launch funds and things to help. It's in our interest for their services to stand up positively and well and with the seats filled. So similar to our historic posture on that front, we do provide support in regards to marketing, and Stewart, that features in the cost line as part of that.
Stewart Leslie Reynolds: Yes.
Robert Koh: Okay. Great. Maybe just to drill into one aspect of -- a very comprehensive answer. Can you maybe talk to cargo trends with the U.S. as well as the PAX side? And I guess, we're all thinking it's very difficult to predict the U.S. That's, I guess, the background for the question.
Carrie Hurihanganui:
Chief Executive: It is -- Rob, as far as -- I don't actually have the latest stats for North America specifically on that. However, cargo has been performing positively generally as far as the year-on-year stabilization. And certainly, other routes, if I think about places like China that I've just talked about well, we might actually grab that and come back to you through Stewart's team, Rob, because I just don't have the breakdown in North America, but cargo overall is performing positively. What we're seeing come through and fits very well with part of our infrastructure program over the future cargo precinct as that's progressing as well. So let us take the cargo North America question, and we'll look back to you.
Robert Koh: Yes. Yes. Appreciate it. Okay. Maybe a question for Mr. Reynolds, just so he doesn't get bored. I guess with the gearing obviously looks very comfortable, but the absolute amount of debt is increasing for obvious reasons. I wonder if you could just give us an update on how you're thinking about hedging that debt? And if there's any kind of incremental thinking on that, please?
Stewart Leslie Reynolds: Yes. So we are constantly looking at our risk position when it comes to managing that debt level. And so we've, you see over recent years, progressively relaxed the amount of debt that we had essentially fixed as we rode the interest curve down and then progressively added more as fixed as we saw the interest rate environment changing. So where we sit now with the majority of debt sort of fixed as we go out to do further debt issuance, we will more likely then fix or lock that in, so reduce the inherent volatility in that line, as where we see in the current interest rate cycle rates are sort of trending towards the sort of lowest level from our internal analysis. And with that, margins have also come in as well, and so you'd expect that sort of fixed number to increase.
Operator: Next question comes from Amit Kanwatia from Jefferies.
Amit Kanwatia: Maybe if I can start on the NPAT guidance, and I appreciate your comments earlier on the depreciation and finance cost. If I look at the EBITDA, I mean that's that increased 14% on the PCP in '25. I mean you're saying passenger volumes to be increasing, aero charges higher, commercial activity kind of reasonably strong as well. Maybe if you can speak to how should we be thinking on the growth rate of EBITDA into next year; should be similar, more or down than what you saw in '25?
Stewart Leslie Reynolds: Yes. Good question, Amit. So in terms of EBITDA, and I'll come back to sort of Andy's question around depreciation. And where we sit today, we have a combination of higher depreciation charge flowing from the increased investment in aeronautical infrastructure and some of our commercial lines of business. So you're seeing a step change in that going forward as that infrastructure commissions. And whilst we're doing a good job of sort of managing that interest line together, we can see a scenario that essentially has both of those towards that sort of $300 million number that I talked about earlier. And so when you bring it back to the sort of EBITDA, whilst we're going to see essentially margin expansion because the cost of funding that revenue that flows through is below the line, it will be more progressive over the next couple of years before we commission or should I say some of that infrastructure ultimately turns up in aeronautical revenue from PSE5.
Amit Kanwatia: Right. Okay. That's useful. Maybe if I can move to the passenger growth outlook. And I think recovery is around 90% of pre-COVID levels, which is obviously improving few percent into '26. I mean previously, you spoke to full recovery around '26, '27, and I know you do a very good bottom-up kind of thinking into this. Maybe if you can give us a sense of how do you see passenger recovery to be hitting back to pre-COVID levels?
Carrie Hurihanganui:
Chief Executive: Yes, absolutely. Amit, one of the things earlier this year when we took our master plan out for consultation, that was really key that we understood some of the -- that passenger forecast as part of that. What that showed us is that really -- a couple of things, you're going to get international recovering before domestic is our view and a lot of that is tied to, as I was saying before, whilst we've seen 14% growth, for example, from Jetstar for Air New Zealand in those -- as their proportion of flying until the engine issues are resolved. So that's going to see that hamper them based on, obviously, outlooks that they're providing around that engine issue washing through. So domestic will be slower than international, but it's looking to be FY '28 based on what we're seeing on our master plan assumptions of forward forecasts.
Amit Kanwatia: And is that for international and domestic be after '28, is that?
Carrie Hurihanganui:
Chief Executive: No. We're saying FY '28. That numbers are back to 2019, we don't have absolutes, but our view of what we're seeing on the trajectory, international will recover before domestic. But your total numbers, we believe we'll be back to 2019 levels in FY '28.
Amit Kanwatia: Right. And maybe just last one on the retail. And obviously, you mentioned some pressures around the FX sales. But I think in your speech, you mentioned some concession, recontracting and benefits. Maybe if you want to elaborate on what's happening there as far as your concession retendering, please?
Stewart Leslie Reynolds: Yes, Amit. So what we're doing is got quite a comprehensive program of essentially refreshing our in-terminal retail proposition to ensure that essentially underperforming retailers are then swapped out for ones that would better resonate with the traveling public. And this work stream effectively looks at all the different categories from destination, food and beverage, et cetera, to ensure what we're providing is fit for purpose for the traveling public. And whilst it's not particularly focused in 1 category, what you see is it starts to go in waves. And so over the next -- essentially the next 12 months, we'll do some further work in food and beverage, we'll do some further work in the destination categories. And what you'll see from that is just the constant update and reinvigoration of that in-terminal retail proposition. So as the traveling public comes through, it still is an exciting place to spend time, and with that, hopefully spend.
Amit Kanwatia: Sure. So the way to think is it's more about the terminal retail refreshed offering, and there should be some associated benefits on back of that refreshed offering from higher spend rates maybe?
Stewart Leslie Reynolds: Yes. And so it's a good example of that, we're seeing that in food and beverage. We're -- and we're not alone in this. As a category, we've moved to more fresh products rather than sort of the quick service, and so what you're seeing is having that greater choice with some fresh and healthy alternatives is really resonating with the traveling public and the breadth of offering then resonates with the wide range of passenger mix that we have here in Auckland and so that will continue. And that was something that we've seen not only in FY '24, but also over the last 12 months as well.
Amit Kanwatia: Right. And maybe just last one. I mean just last one on the duty free. And -- I mean you touched on the new operator starting, I mean there is a period of transition. But maybe if you can speak to -- I mean how the new duty-free contract compares to the old one? I mean also in terms of the potential kind of risk, retail risk you're undertaking, but also the potential upside from some of those? I mean the point is how much -- I mean, I'm just curious, like how much role can you play to improve passenger spend rates into the new duty-free mix?
Stewart Leslie Reynolds: Yes. Amit, it's difficult for us to get into the details of it because it's obviously a commercially sensitive contract. But what I can say is the airport is prepared to take more risk when it comes to passenger volume. And also as part of that, look at its terms to ensure that they're aligned with the retailer when we want to do things like product promotions, bundling, et cetera, to ensure that the retail proposition continues to resonate. And you'll recall a year ago, we were talking about promotional activity in in-terminal retail where through reducing our concession rates in certain categories, we drove higher revenue. And what we will look at going forward is further work in this area to ensure that, that retail proposition resonates with the traveling public. So our lowest price point promotion in Australasian in relation to certain spirit categories really resonated with the traveling public, and we'd like to ensure that, that continues to do so.
Operator: Our next question comes from Marcus Curley from UBS.
Marcus Curley: Just a couple for me. Just on the CapEx, Stewart. You came in at the low end of the range that you provided at the beginning of the year. Looked like commercial CapEx was pretty robust, so could you talk to a little bit on the progress on the investment plan? Is it right to assume, given that levels of investment at the moment, that things are a little slower?
Carrie Hurihanganui:
Chief Executive: I know you pointed at Stewart, and he'll have something with say on this, Marcus. But again, of the capital this year, $878 million was aeronautical. So in terms of significant forward progress on this. And yes, there was also some of the commercial elements. So I think the -- we are actually pleased with the progress of how things are going, but there are some changes if you look in a year. And probably the example I could use would be the airfield, international airfield that I talked about, that 250,000 squares that we'll be opening in quarter 4 this calendar year, that was originally programmed to open in FY '25, June, I think, is where we originally had that. Now that has moved by 3 to 4 months. So some of that's tipping over into FY '26 in the tail end, obviously, of that spend. In terms of doesn't impact critical path for the integrated terminal -- it's connected, obviously, because that's where we'll decant some of the aircraft for the stands. But in terms of the way it's being managed, it doesn't have an impact on the critical path. Things are still moving. It performed well in terms of kind of what we were thinking at budgeting levels and otherwise. So there is overs and unders. We do have some movement, but that would be an example of we do see things moving, but not moving where we are concerned that the program is not going to deliver to our 2029 opening date, if that makes sense. But Stewart, you might want to...
Stewart Leslie Reynolds: Yes. I think that's a really good summary, Carrie, there's other projects, which like the cargo precinct we had phased earlier. Now that's still happening, but that's not on the critical path of terminal integration. And so that's moved more to the right, but it's still underway. And so you get these unders and overs as you go through that. And overall, as Carrie mentioned, we're still comfortable with the progress of the program.
Marcus Curley: Because when you refer back to the original aeronautical pricing, the year just finished was supposed to be aeronautical investment of 1.1. This year coming was 1.2. So there are obviously relatively meaningful differences in how much you're spending relative to the original proposal. So are you saying that this is just all going to catch up in 2028 and 2029?
Stewart Leslie Reynolds: In short, what you're seeing is just slight changes in some of the deliveries. And so there's a combination of, what I would describe as, smaller elements, whether that's the inner terminal road, some of the work we've done around the Western Forecourt, the work that's currently now underway in relation to regional stands, which in themselves are not big numbers in terms of spend in FY '25, but they've moved slightly to the right. And so we believe that those projects either have completed or will do so in a time frame that fits with the overall program, but you're just seeing, as you'd expect, with a program of over the hundreds and hundreds of projects, a little bit of flex when it comes to timing.
Marcus Curley: And Carrie, you mentioned the domestic terminal opening. So by looking at the slides, is it right to assume late 2029, so FY '30, for the opening of the domestic terminal?
Carrie Hurihanganui:
Chief Executive: So in terms of, we are looking calendar year for practical completion and then the operationalizing of that. And so the practical completion in the first half of '29 is what we're targeting. The operationalizing, obviously, as you get closer to that, Marcus, in terms of -- we have standing all right processes or operational process, that's probably the ones got a little bit of flex in it, but you'll have practical completion and then operationalizing of it, yes, it'd be second half of 2029, most likely.
Marcus Curley: Yes. So where I was getting with this is, so where should we put the increase in the airport charges associated with domestic terminal? Is that now looking like FY '30 or should we still be comfortable assuming that the charges lift in FY '29?
Stewart Leslie Reynolds: So Marcus, what we are looking to do is ensure, as elements of the program are completed, that we commission those and make those available for our airline customers as soon as practical. So when it comes to the domestic terminal itself, it's difficult to operationalize a head house and appear without doing all of it. And so I'll come back to Carrie's comments in the second half of '29 is, I think, a fair estimate, but there's other elements associated with the airfield that we'd like to, to the extent that's possible, potentially commission that earlier, but it's still work in progress, how we do that.
Marcus Curley: Okay. And then just switching over to passenger volumes. The guidance at international, I think, is the 3% growth. Like I do believe the schedule at the moment would suggest more like 5% seat growth. Is there -- outside of, let's describe it as conservatism, is there anything else that you're calling out in terms of demand versus supply heading into FY '26?
Carrie Hurihanganui:
Chief Executive: Well, I said as far as the work we've done, if we look ahead and some of the work we did on demand and master planning, you tend to -- capacity -- you tend to get 100% load factor, so you will always have a delta between potentially what your capacity is versus what your passenger loads are, but from our perspective, that we think internationally, at 4 26, the 3%-odd is appropriate based on what we know is coming through in that supply side. We know that capacity is down even with load factors up. It's not going to tip up into -- you just don't get international flights into kind of 95% load factors. So there will be a difference between those 2.
Operator: Our last question comes from Grant Lowe from Jarden.
Grant Lowe: Just first question around the retail side of things. So just looking at the passenger spend rates, there was a number of different sort of measures quoted there. And if I think about the first half versus second half, I appreciate these numbers are on a different basis, so we had a full year PSR down 9%, where that number was more or less flat in the first half, albeit on a different basis. So if we think about on a consistent basis, how would you describe the PSR change first half versus second half?
Stewart Leslie Reynolds: Essentially, the first half '25, Grant, versus second half '25, a reduction in PSR reflected really reduced spend in the luxury categories and the impact of further underperformance in the foreign exchange category.
Grant Lowe: Yes. Okay. So -- yes, momentum down. If we strip out the FX side of things, though...
Stewart Leslie Reynolds: If you strip it out...
Grant Lowe: What's sort of underlying...
Stewart Leslie Reynolds: It's the opposite. It actually goes up. So improved performance, and that reflects I think the improvements the team has done in relation to food and beverage and the work that's also been done in duty-free around promotional activity, product bundling, et cetera.
Grant Lowe: Yes. Okay. And then just around the OpEx side of things. So as you sort of called out, like more or less flat around the $115 million per half for the last sort of while. How do you see that developing on the go-forward? Obviously, cost out program or managing costs, I should say. But do you see any sort of key areas of pressure on that in terms of inflationary or any conversely sort of there was a couple of one-offs in the current year, how do you see the OpEx developing over the next 6 to 12 months?
Stewart Leslie Reynolds: Yes. So if you look underneath it, and that's why we sort of added that information in the supplementary section of the presentation, staff numbers or cost was relatively flat half-on-half. And where we saw the significant increase was in the asset management, maintenance and airport operations category, where we do import a bit of inflation in there. And part of that is driven from higher R&M spend as our asset base grows and further work is done. And we've got some, what I'd describe as, assets that are reaching the end of their life, and so requires a higher spend to maintain that quality offering that we pride ourselves with. You're seeing further inflationary pressure in the rates in insurance as the asset base grows. And so that's starting to still, unfortunately, increase up, but it is being moderated by, what I would describe as, improvements in the insurance market. So the prices are holding, but our asset base is growing. But notwithstanding that, I'm quietly optimistic of -- around the work that the team is doing on our cost reduction. And with that, we're managing to ensure there's efficiency in the cost base and further work is going to be done on the digital side of the business to help drive that and ensuring we're spending in the right place, but it is a constant focus of the team.
Grant Lowe: Yes. Okay. So I mean, should -- we should expect cost growth going into the next year, though?
Stewart Leslie Reynolds: I wouldn't like to think it's significant, but as a business where there's a significant part of our cost base is outsourced, what we need to do is ensure we not only maintain that level of service, but we've contracted some of those operations and so then you will see cost growth in that. But our challenge is to ensure our revenue grows or, should I say, outpaces any cost growth.
Operator: Thank you for all the questions. I will now turn the conference back to Carrie for closing remarks.
Carrie Hurihanganui:
Chief Executive: Well, listen, thank you for your time today. I am conscious of the time. We've gone longer than we necessarily intended to. We certainly look forward to connecting with many of you over the coming weeks of investor meetings, both here in New Zealand and Australia. So we will wrap it up there. Thanks, everyone. Have a great afternoon.