Auckland International Airport Limited (OTCPK:AUKNY) Q4 2022 Earnings Conference Call August 17, 2022 7:00 PM ET
Company Participants
Carrie Hurihanganui – Chief Executive Officer
Philip Neutze – Chief Financial Officer
Conference Call Participants
Andrew Bowley – Forsyth Barr
Wade Gardiner – Craigs Investment Partners Limited
Amit Kanwatia – Jefferies LLC
Andrew Steele – Jarden Limited
Alexander Prineas – Morningstar Inc.
Marcus Curley – UBS
Operator
Good day, and thank you for standing by. Welcome to the Auckland Airport Annual Results Presentation. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [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, Auckland Airport Chief Executive, Carrie Hurihanganui. Please go ahead.
Carrie Hurihanganui
[Foreign Language] Welcome, and good morning to everyone joining on the call. As outlined, I’m Carrie Hurihanganui, Chief Executive of Auckland Airport, and today I am joined by Chief Financial Officer, Phil Neutze.
I am really pleased to be able to share the financial results from FY2022 with you. Particularly, as we look at after more than 750 days since COVID began, FY2022 was definitely a year to have with the majority of the first half constrained as you know, by lockdowns and travel restrictions both at the borders as well as domestic borders, and then the second half starting to see the easing of those travel restrictions and most notably the border reopening to Australians from April.
Now, with that, we have seen a steady and gradual return of long awaited domestic and international travel. Our teams have been working hard to ensure that New Zealand is on the radars of international airlines and supporting them with their relaunches. It is a competitive market globally with travel volume skyrocketing in some markets. And key for us in what’s on our mind is as we attract travelers back to New Zealand, ensuring that we, and that is the Royal we from a New Zealand perspective can deliver on the quality of experience that they expect, which will be vital from an [NZ INC.] brand perspective, word of mouth and return visitations.
Now we’ve got quite a bit we’d like to cover with you today before we do get into the Q&A session. So let’s jump into Slide 3 to kick things off. And these pictures represent that recovery has been driven by the desire for reconnections, families and friends, business partners that had been apart for over two years and that drive to come together has been aptly named revenge travel. And that has certainly been in play with international capacity increasing quickly to 40% of pre-COVID levels just over those two short months from April through to June that jumped again in July to over 50%. So we are seeing that desire to reconnect well and truly.
If we move to Slide 5 and start to look at the results themselves. Again, the full-year results do reflect a year that continue to feel the impacts of the pandemic in the first half and then that recovery starting with real meaning as we headed into quarter four. Now, passenger movements really starts to lay that game of two halves, I’ve talked about before declined overall by 13% to $5.6 million. Now that was primarily driven by the decrease in domestic PAXs. That was 27% down from the previous period or previous year.
Now that was partially offset by the increase in international travelers or passengers that includes transits of an increase of 123%, but it wasn’t quite enough to offset from a net perspective that domestic decline. That then plays through as we look at the financial year revenue, it did increase by 7% to just over $300 million and that is played through with lifts across aeronautical, retail and property revenue lines. Operating EBITDAFI declined from that previous year by 16% to the $144.5 million.
Now FY2022 will be Auckland Airport’s second ever annual result of underlying loss at $11.6 million. That is up $27.8 million or 71% from FY2021. Total reported profit after tax was $191.6 million, that is down 59% and no dividend will be paid. Aircraft movements much like passengers, that was down to 10% again, driven by the drop in domestic movements in the first half. That drop was 19% due to the domestic lockdown and travel restrictions. But what we did see in the gradual reopening of borders, the international movements were up 21%.
And finally from a capital expenditure, again, we saw a lift from FY2021, an increase of 29% to just over $253 million. And that really was reflecting the increased core aeronautical investment and renewal activity that we took particularly when there was lower activity and traffic, and that was across airfield and roading networks. It also included expenditure on the planning enabling works to support the future development of the integrated international and domestic terminal alongside some property development, such as the Hellmann Worldwide Logistics and the works that have commenced on the Transport Hub.
As we move to Slide 6. The second half of the FY2022 started to see that recovery really beginning to show in key business lines. Aero revenue lifted 7% to $94.7 million, and that was driven by those borders starting to open and more international passengers again, the domestic offset. Without sounding like a broken record, I suspect, that is going to be the theme that you are going to hear throughout this. From a retail revenue perspective, that was up 28% on prior year. And while domestic retail did suffer relative to FY2021, the opening of borders really has led to a positive injection or impact into that international retail performance as that starts to gain some momentum.
Car parking income decreased by 9% again, that those elevated Alert Levels associated with Delta and Omicron outbreaks played out there. However, with things now returning to and I hesitate to say a level of normality, but the new normal, we are seeing domestic car parking demand outpacing passenger recovery. I will pick this up in a little bit more detail later in the presentation.
Property continues to be resilient as it has and was in FY2021 as well. Rental income was $112.9 million, which was an increase of 12%. Now the income growth in the year was primarily driven by new properties leased this year. So that is Hellmann and Geodis Wilson. Rental growth from the existing portfolio and the full-year effect of properties leased last year. When we look at hotels, the underlying performance was supported. If you remember, the Novotel was in use as a Ministry of Health quarantine facilities throughout the majority of the period. And if we look across both ibis and the Novotel, the average occupancy for the year was 40%.
Then if we look at Queenstown, again, similar story, the decline in overall performance and passenger numbers was related to that first half of the year with domestic passengers decreased by 16%, but also saw a lift in international PAX volumes of 50% with a large proportion of those coming through in quarter four.
We move to Slide 7. Key message here is Auckland is open full business. Now while passenger numbers were impacted in the first half, there have been clear signals of the desire to return to travel in the second half as borders have begun opening. International air travel now is the strongest it has been since COVID first closed our borders. It hit close to 40% as at June and then domestic reaching over 80% by that point in time.
We move to Slide 8, please. Our focus really is about setting up for the future. With borders open, our focus is to reconnect New Zealand to each other in the world and to do this, we are working with airlines to rebuild capacity, frequency and passenger numbers. Now we know how much our customers enjoy shopping and the dining experience, it really is part of that overseas holiday or work trip, and we are working incredibly hard to make it the best experience possible.
And that means ensuring that all relevant travel-related products and services and retail are up and running to meet the increased activity and dwell time that comes with that. Inline with this recovery, we are also now focused on reestablishing the key aeronautical infrastructure developments that had been put on hold when COVID took hold alongside continued investment in commercial property developments that makes sense.
Now I’d like to hand over to Phil to take us through the financial performance in detail before coming back to talk a little bit about that forward look. So Phil, can I hand to you?
Philip Neutze
Thanks, Carrie, and welcome to your first full-year results webcast. So isn’t it great to finally see a strong rebound happening in both domestic and international PAX over May, June and July this year. We are on Slide 10 now, and even though the last two months of FY2022 were much stronger than FY2021 in terms of international PAX, total PAX volumes were down 13% on FY2021, as Carrie mentioned, and this was because of the devastating impact of Auckland’s regional lockdown on domestic PAX, especially over September, October and November last year, cast your minds back. And we are calling this the 107-day lockdown. Hopefully, we’ve got the number right. Domestic PAX were therefore down 27% versus FY2021.
On to Slide 11. International flight movements and MCTOW were up approximately 20% on PCP, and this reflected the progressive loosening of border restrictions from the end of February this year. But this was way less than the 124% increase in international PAX that we enjoyed in FY2022 admittedly off a low base. And it reflects that international flight movements and seat capacity have been supported since March 2020. And that was first by the international air-freight capacity scheme and that was replaced by the Maintaining International Air Connectivity or MIAC scheme in May 2021. So there has been a significant surplus of international seat capacity until quite recently, that dynamic has obviously changed recently. And this facilitated the more than doubling of international PAX that we saw in FY2022 with only 20% more flight movements.
Moving now to Slide 12. So the revenue picture is pretty clean. In FY2022, we had a 7% increase on PCP to circa $300 million, but expenses are much more complicated. Sorry about that guys. But ladies and gentlemen, PCP expenses benefited from just over $21 million of reversals of over accrued expenses in FY2020, and these related to CapEx project write-offs and termination costs and expected credit losses.
FY2022 expenses on the other hand include another $6.9 million of CapEx project impairments, and these mainly relate to some changes we expect to the Park and Ride south project when that gets going domestic Strata Lounge in the Northern runway design costs. These projects will pause and as I mentioned will likely be [indiscernible] when they recommence. Adjusting for these abnormal expenses and credits as well as changes in government wage subsidies received over both years, normalized OpEx was up by 16% in FY2022, and we set this out the normalized analysis on Slide 37. So take a look at that.
FY depreciation of $113.1 million came in a smidgen below the bottom of the $115 million to $120 million guidance that I gave back at the interim results announcement in February. And FY2022 interest of $53.7 million was similarly just below the bottom of my $55 million to $60 million guidance.
We are now on Slide 13. Passenger services charges increased by 40% in FY2022. And this is because of the doubling of international PAX versus PCP, and despite domestic PAX being down 27% and total PAX being down 13%. And the reason why that all adds up is because international passenger charges are roughly 5x domestic charges on a per PAX basis.
Similar story for retail income, it lifted by nearly 30% in FY2022, again, despite total PAX being down by 13% and it’s for the same reason. It was very pleasing to see yet another solid lift in investment property rental income. It was up $12.4 million or 12% for the year. Three quarters of this increase was from new properties added to the portfolio either in FY2022 or part way through FY2021, and the balance came from existing property rent increases partly offset by the $1 million increase in investment property rent abatements that we provided to a small number of tenants that are still struggling under the impacts of COVID-19.
As I mentioned earlier, despite Slide 14, which we are now on showing a 42% lift in OpEx in FY2022 versus PCP. After adjusting for the big swings and CapEx project impairments, expected credit losses in government wage subsidies, normalized OpEx was up by 16% and this reflect the planned ramp up in headcount and operational activity to ensure that we were well placed for the international PAX ramp up that we expected in the second half of FY2022. And we are pretty pleased with how that panned out. I don’t think we saw quite the level of congestion issues that have been experienced in other airports globally. So our philosophy there is to get the resources on board slightly ahead of the curve, so that we can continue to focus on customer experience.
But back to the numbers, to add to the noise in FY2022 expenditure figures, FY2022 depreciation expense reduced by $4.2 million. That was after we restated the FY2021 results to expense software-as-a-service investment that had previously been capitalized. So once that was expensed, that lowered our depreciation by that $4.2 million I mentioned. And interest expense reduced dramatically in FY2022. This reflected the significant reduction in average debt balance over FY2022, following the repayment of US$400 million of USPP borrowings over that financial year of FY2021. It also reflected the one-off USPP prepayment and swap closeout costs of nearly $24 million that adversely impacted FY2021.
So on to Slide 15 now, I’ve already talked about the OpEx noise across FY2021 and FY2022. And after we adjust for that, there was a $20.7 million increase in normalized OpEx in FY2022. The main components of this increase was just over $9 million increase in staff costs and nearly $4 million increase in outsourced operations. So that funds the likes of the car parking activities, trolley services, bus operations, and the like, and circa $10 million increase in repairs and maintenance. And we took advantage of the low PAX numbers to accelerate some proactive maintenance during the year. And these increases were partly offset by $1.9 million of reductions across some other expense categories.
We are now on to Slide 16. So this is pretty self-explanatory and it lists the key projects comprising our circa $250 million net CapEx in FY2022 that’s after $6.9 million of impairments. This was at the low end of the $250 million to $300 million CapEx guidance that we gave for FY2022.
So moving to Slide 17. This shows that total drawn debt increased by circa $84 million to just under $1.5 billion as at 30th of June 2022. This is more than $700 million below Auckland Airport’s peak borrowings that we had of $2.19 billion that was in 30th of June 2019. And obviously this debt repayment was financed by the $1.2 billion equity raise that we completed in early April, 2020. Also during the FY2022 financial year, we went back to the debt capital markets for the first time in approximately two years and we successfully raised $150 million in the New Zealand debt capital markets, and that was November, 2021. And we also refinanced nearly $230 million of bank facilities that would otherwise have matured over the upcoming financial year.
And we agreed new EBITDA-based interest coverage covenants with our banking group in February, 2020. This was a next step from the agreement that we reached back in July, so this was in February, 2021 I should say. No, 2022. Let me get that right. Sorry guys and girls. Yes. So we’ve agreed new EBITDA-based interest coverage covenants with our banking group in February this year, that’s 2022, next step from back in July, 2021. And this was a prudent step given the uncertainty at the start of this financial year about how the remainder of FY2022 would play out. But in the end, we delivered interest coverage of 2.58x in FY2022, and that was versus the previous EBITDA-based interest coverage covenant of 2x. So it was an abundance of caution.
So now on to Slide 18, and this is really just an FYI on our balance sheet. There’s not a lot I need to say about this one and perhaps I’ll just call out that the equity book value increased by 3% versus PCP. And this increase was driven mainly by the $204.4 million investment property revaluation that went straight to retain earnings and the net $74.4 million revaluation increase in the property, plant and equipment asset class and that went to revaluation reserves.
So back to Carrie.
Carrie Hurihanganui
Fantastic. Thank you. Phil, can you talk a little bit about the way to from here, the journey ahead, and if we move to Slide 20. On that, I think we can say that the recovery as well and truly underway. I think if we look back to March, we were sitting at about 20% of international capacity compared to 2019. And that is looking to grow to be anticipated at 70% by the end of this calendar year. So international seat capacity has continued to show positive growth.
Now I do need to call out these numbers are based on slot filings. So that is what we anticipate to operate and what our airlines are telling us they are going to operate. We do know, and we do see sometimes that what’s filed versus what’s operated can have a little bit of variability in that, but the restarting of previous route has gained momentum since boards have started opening meaningfully from March and April. We have seen a significant step up in July following the end of the financial year with Air New Zealand restarting over eight more of its key routes in July. Hawaiian restarted to Honolulu, Air Tahiti Nui going to LA via Papeete, and Qantas will step up from 55% capacity in June to 64% in July. So we have been seeing that continue also, incredibly positive to see some new routes also being announced as part of this recovery.
Air New Zealand launched to New York from September American Airlines flights to Dallas Fort Worth from October this year, and then the most recent AirAsia X operating Kuala Lumpur via Sydney from November this year.
Move to Slide 21, please. A little bit – reconnecting New Zealand a little bit of back to the future, and that’s based on – if we look at a pre-COVID environment, there were 29 airlines operating to 43 destinations. At the worst of the pandemic, there was only 12 airlines operating to 21 destinations and to be honest, somewhat infrequently at that point in time. Now by the end of financial year 2022, there were 18 airlines to 26 destinations. So it was starting to tick up again. As we sit here today, there are 18 airlines to 34 destinations. So even from the closure of the financial year, we are seeing that continue to build. And again, if we look at what slot filings are telling us by the end of this calendar year, there will be 23 airlines to 37 destinations. And that starts to get us back to a reasonable regional coverage across the Middle East Asia, the Americas and the Pacific.
Moving to Slide 22. One of the key pieces when we look, we are clearly in recovery, but Auckland Airports long-term fundamentals remain strong, although that is not without some challenges throughout recovery, which at the point when Phil starts to talk about outlook, we will talk a little bit more about that, but the drivers of growth are positive. I’ve just captured and talked about those airlines that are returning to New Zealand. New Zealand does remain an attractive destination both for its experience and landscapes and all of those things, but also the perception of being a “safe destination in a COVID world.” So there is upside in that, we believe.
The downside challenges, I don’t think are news to anyone. Labor shortages, inflation, supply chain challenges, they continue to plague the industry. And to be honest, not just aviation to be fair, but the risk of slowing recovery in some markets as a result is something that we are just cognizant of. Finally, we often get asked about the view of is there a risk of any future lockdowns. Listen, I think that future government positions on that, you can never say never, but you get a sense of that is a lower downside risk than it certainly was 12 months ago as we looked at that.
If we can move to Slide 23, please. Auckland Airport is entering a period of investment and we really need to be positioning ourselves for the future and transforming Auckland Airport into a world-class travel experience. Improvements to domestic travel are our first priority. The domestic terminal is now more than half a century old. And while we’ve continued to reinvest in that facility to support growth in domestic travel and the needs of travelers, this infrastructure is now nearing the end of its life.
It’s vitally important that Auckland and New Zealand’s economy is supported that that we invest for their future and creating a domestic travel experience that Kiwis can be proud of. Our priority project is creating a combined domestic and international jet terminal at the eastern end of the existing international terminal. And this is a pathway that last year we gained support by Air New Zealand and [indiscernible] representatives.
Now we’ve undertaken some significant work over financial year 2022 on the design enabling of the new integrated domestic and international terminal. And that was really to capture on the fact that we had lower activity and lower traffic, and when you are looking clearly in the airfield, that’s the ideal time to start to look at that. Design enabling works are well advanced for the relocation of the eastern truck dock, demolition of the eastern bag hall, which is underway as we speak and the planned relocation of eastern airfield operations. Now we are currently in consultation with airlines on our detailed capital plan and look forward to sharing more with you in the coming months as that rounds out.
If we can move to Slide 24, please. Now what comes with an increase in activity clearly is the reopening of the airport proposition. And that is a key focus for us that again, the experience our customers expect is when they return to travel to reconnect with family and friends, they are expecting to have the full airport experience. We did see, as Phil had outlined the upside of retail income on the prior year and again, that was primarily driven through the opening of borders in international retail offering return.
As at the 30 of June, 90% of the domestic and 45% of the international retail offering was open. Duty free is a key component of retail strategy and we are currently in discussions with the existing duty free operators regarding extensions to the current contracts while a full retender is planned for the end of FY2024. One of the things we do know is our retailers are captive to fall through the terminal and we continued our support through retailers over FY2022, as part of that with $173 million of rent reductions and abatements as part of that.
We are really pleased in regards to the broader proposition in the International Terminal to also reopen the Auckland Airport Strata Lounge in the International Terminal from the 1 of July, and have been very pleased with the demand that we saw – have seen coming through, but particularly from that first week of opening, so there is clearly a desire.
If we move to Slide 25, please. Earlier in the presentation, I talked about parking and how it had recovered. What we are seeing is it’s recovered a slightly different profile than pre-COVID, while revenue was down by 9%, which did reflect the lower passenger numbers particularly in that domestic side. Once the full suite of product was open and on sale from quarter four, we did see a considerable uptick with an 11% higher quarter four in FY2022 than we did in FY2021.
What we have been seeing particularly kicking off from July is the recovery in domestic parking outpacing the passenger recovery with a higher propensity to drive. In the conversations I’m having with other airports such as Dallas Fort Worth to LAX, that is a common phenomena, if that’s what you’d like to call it. And I guess the question we have is whether that a structural change or a transitionary change, which remains to be seen.
We can move to Slide 26, please. The Transport Hub, we closed Carpark A in June this year to make way for construction on the new 2,500 bay Transport Hub and office development to get that underway. We are really excited about this development, and the fact that we’ll provide a world class covered facility that will provide multi-mode transport access for today. And that would be through integrating public transport, pickup, drop-off and parking, but it also sets us up beautifully through to the future and whatever rapid mass transit looks like in our future state. We are on track for the pickup, drop-off area to open at the end of 2023 and the remainder of the facility in the office block of that in 2024.
If we can move to Slide 27, please. Commercial Property, I mentioned before it remain resilient and we have seen continued income growth and diversification through that. Solid development pipelines continue on both new and existing tenants, including the completion of the Geodis Wilson and Hellmann. There is five new industrial developments that are currently under construction and expected to add $9 million in rental income once completed. You can see the figures there on the slide that we’ve seen an increase in the rent roll to $127.5 million, an increase in the portfolio value for the investment property to $2.9 billion. Weighted average lease term is looking good at 9.4 years and an occupancy rate of 99%, so all around very strong and solid performance.
Earthworks are underway. The new retail outlet centre and design continues in that space. We are now underway in leasing conversation for that 24,000 square meter area that will have retail shops and space available with really strong interest coming from major international brands for that 100 plus store center.
And finally, in conjunction with Tainui Group Holdings, we recommenced the fit-out construction on the Te Arikinui Auckland Airport Hotel with expected completion in the first half 2024. And The Mercure remains on hold in the short-term, we are ready to push go on that as demand picks up again.
Moving to Slide 28, we remain incredibly focused on delivering to our sustainability agenda and never has it actually been more important. Now we’ve got the four key pillars of purpose, place, people and community and how we are tackling some of the material issues we see there. We are focused on the customer and also how we deliver to wider economic contribution. We are defining our pathway to achieve our net-zero carbon objectives, and we have set a pathway to be net-zero on Scope 1 and 2 by 2030. We are focused on being a responsible employer, which includes health, safety, and wellbeing, diversity and inclusion and our social impact.
And finally, we want to be a good neighbor including the Community and mana whenua involvement and supports incredibly important as part of South Auckland and we’ve had some great initiatives underway that we are really delighted to be picking up momentum again as recovery starts to grab hold.
Moving to Slide 29, please. We are on a mission to drive down our emissions, particularly as we look at climate change. We recently signed up to the latest version of the Climate Leaders Coalition Statement of Ambition. That pathway I talked about before are Scope 1 and 2 emissions, and reducing that to reach net-zero by 2030, and that is aligned with the 1.5 degree trajectory. And we are committed to minimizing Scope 3 emissions within our control and really starting to explore more in that place.
But one of the key roles we know that we can play is ensuring that the right infrastructure is in place to support the wider decarbonization of the aviation sector is aircraft operations make up the significant portion of Scope 3 emissions from our perspective, we need to ensure that infrastructures in place that allows airlines to adopt low emission aircraft technologies in fuels as they become widely available in our master planning is taking this into account.
And moving to Slide 30, please. I guess in rounding that out from my perspective, Auckland Airport continues to take a long-term view and remains optimistic about the future and we are well positioned for long-term recovery. To achieve that, however, we are focused in on the year ahead as recovery needs to continue to gain pace. The airport is part of a broader aviation ecosystem. What that means is to move forward positively together is critical to ensure we have a stable recovery that means reestablishing the network and leading the recovery and travel and the visitor economy. It means ensuring our products, services such as retail, transport, hotels, and the like are on offer and able to stay ahead of the demand profile that we see. And as this recovery gains momentum, we will also look to pick up the pace of the investment in our infrastructure and commercial development.
So in summary, we are progressing our capital pathway to build a stronger Auckland Airport. We are focused on delivering a world class customer experience and fueling our future success.
With that, I’d like to hand back to Phil to walk us through the outlook and looking ahead to FY2023. And then we’ll look to open up for questions at that point. Phil?
Philip Neutze
Thanks, Carrie. And as Carrie mentioned, not long before we open up to Q&A, just a couple of slides and we are now on Slide 32. So the Price Setting Event 4, price reset will be determined once we finish airline consultation on all elements of the building blocks model. And this will conclude by June next year at the latest. As we discussed back in February, FY2023 prices were frozen at FY2022 levels, but we have also excluded the $2 plus GST RRI charge that applied last financial year from October to June. The shortfall versus our target return in FY2023 will be recovered by higher prices over the remainder of PSE4 for FY2024 to 2027.
And at the moment, the Commerce Commission is reviewing the input methodologies. These underpin the aeronautical information disclosure regime, and our main argument and our submissions is that the commission should repeat the exercise. It’s done in the last couple of times and updated asset beta estimates using the last 10 years of data. And we’ve looked at that, that would lift asset beta whack and target return quite appreciably.
And so finally before we open up for Q&A, looking at Slide 33, this is our guidance for underlying profit after tax and CapEx for FY2023. So we are forecasting underlying profit to be somewhere between $50 million and $100 million in FY2023. This assumes at the midpoint that the domestic PAX average circa 80% of FY2019 levels over the year and international PAX average to about 60% of FY2019 levels. Now this is admittedly starting to look perhaps a bit conservative with July domestic PAX at 85% and international at 50%. And as Carrie mentioned earlier, we are seeing that the airlines are falling 17% of international capacity over the Christmas break.
This guidance also assumes a big lift in depreciation expense in FY2023 to somewhere between $145 million and $150 million. And this is mainly due to the significant uplift in our buildings revaluation as at 30 of June, that was $460 million uplift. So that does flow through to depreciation going forward. Of course, that’s a non-cash expense. It also assumes a significant lift in interest expense as we undertake the CapEx and begin to rebuild our debt portfolio somewhere between $65 million and $75 million for FY2023. We are also guiding FY2023 CapEx of between $600 million and $700 million. The expected composition of this CapEx is set out in some detail on Page 19 of the financial report for 2022.
So with that, Carrie and I are happy to respond now to any questions from listeners.
Question-and-Answer Session
Operator
[Operator Instructions] Our first question comes from the line of Andy Bowley from Forsyth Barr. Your line is open.
Andrew Bowley
Thanks operator. Good morning, Carrie; good morning, Phil. Thanks for the presentation. Now a couple of questions for me, the first of which is around the demand outlook, and appreciate the comments you just made Phil in terms of potentially being slightly conservative on your guidance, but also conscious of the slot filings comments you made earlier, Carrie. So keen to hear what the slot filings and conversations that you’ve had with airlines are telling you about early calendar year 2023. In essence on Slide 20, does that blue line continue to rise through calendar 2023? Or do we see a kind of a flattening of the – or plateauing of that recovery through late summer before picking up again later on in the year?
Carrie Hurihanganui
Thanks, Andy, and lovely to speak with you again. Absolutely. So we saw the uptick in July, it then kind of slowed down. Another uptick in October as we head into the peak season, what we are seeing through to June next year based again on slot filings. And I do reinforce that caution. It’s potentially getting somewhere to – could be 80% to 85% in terms of that. And the reason I caution that is, again, it’s only based on what we’re seeing in slot filings. It is based on anecdotal conversations, but airlines generally are keen to return to New Zealand. But there is this capacity piece, which is a little bit, I think Phil was alluding to in the conservatism as well as that there isn’t necessarily a shortage of demand at this stage, but there is potentially the challenge of the capacity to meet that, whether it be aircraft, whether it be pilots, cabin crew resourcing or otherwise. But as we sit here, there is the potential to be 80% to 85% by the end of this financial year.
Andrew Bowley
How about that for international PAX or international capacity?
Carrie Hurihanganui
That is international capacity. Yes. Sorry. And then domestic front, again relatively flat, it kind of climbs to the December number and then at this point based on what we’re seeing holding there. But again, whether there’s any upside on that remains to be seen.
Andrew Bowley
Maybe then if we could just reconcile that to the guidance assumption of $6.2 million PAX international, how do we get to that? And I recognize this is quite fluid in terms of the underlying environment currently, but how do you get to $6.2 million?
Philip Neutze
Yes. I’ll jump in there, Andy. So that’s 60% of pre-COVID international PAX. So we’re starting the year at 50%, that’s where July was. And if we get to 80% – let’s say 80% by the end of the year, that’s 130 divided by two gives you 65% recovery. So yes, it’s a bit conservative, but only to the extent of circa 5%.
Carrie Hurihanganui
And one of the element – sorry, Andy, you’re getting both of us have a going at you now, and this was also the – we are seeing play out, globally you’re seeing in the U.S. and otherwise is airlines again, put capacity in and then potentially are pulling it out. You’ve seen that playing out considerably in the U.S. as well as Australia and Europe. And so again, that conservatism is, there’s a whole bunch of unknowns there, but what we have seen play out in the last three months is something that wasn’t lost on us.
Andrew Bowley
Great. No, thanks. Appreciate that. Now second area of question is around CapEx. So we’ve got the guidance of $600 million to $700 million, recognized that’s quite a step up in terms of what we’ve historically spent here. I think the peak in recent times or ever is around $400 million. I guess the question here is, do you have the capacity in terms of your own internal resources and external contract is to spend that level of CapEx and how confident are you in terms of that guidance?
Carrie Hurihanganui
Yes, thanks. Andy from my perspective, so on a planning basis, we are confident in that, a lot of planning has gone. And as you recall, some of the work was actually starting to gain momentum prior to COVID and we needed to push pause on that. So understanding size and scale and what was required to do that. So the planning has been in on that front and of course, we also have the split across what would be aero activity as opposed to non-aero activity as part of it. So we’re entering in on the basis that we’re feeling relatively comfortable in that space.
Andrew Bowley
Great. Thanks guys.
Operator
[Operator Instructions] Our next question comes from the line of Wade Gardiner from Craigs Investment Partners. Your line is open.
Wade Gardiner
Hi guys. Couple of questions for me. Just in relation to the guidance, can you give a bit of color in two areas there? One, what you have sort of – what you were envisaging or what you’ve agreed with the retailers in terms of ongoing rent relief. And secondly, just in terms of the OpEx recovery, I mean, I think it was last year or maybe it was the year before you’d given an OpEx number of sort of around 170 odd mill. I mean, is that number still valid? Or are we are going to build to something like that over time, or is that affected by inflation and therefore potentially higher?
Carrie Hurihanganui
Wade, nice to speak with you. Absolutely. [I’ll keep] in regards to the question on, was it capacity, was it? Retail, sorry.
Wade Gardiner
Retail.
Carrie Hurihanganui
That was retail. Yes. Those conversation very much in line with – so it’s twofold. One, obviously, I alluded earlier to the conversation we’re having with duty-free around potential extensions for those so that we can go for the full retenders that is in play. As far as relief, we are talking very much in line with PAX recovery, it’s kind of from our perspective, not a 0 to 60 [game] on the basis that we are seeing a gradual uptick. So we are engaging with that transition from what has been released into aligning as that recovery is coming into play and we expect that to continue. Particularly, we’re sitting here as that today at 61% of retail in the international terminal being open, which is ahead of demand, which is at 50% to 55%. We expect that to continue. We want to stay ahead obviously of the capacity. In terms of the OpEx piece, Phil, do you want to pick that up in terms of previous conversations and guidance in that?
Philip Neutze
Yes. Thanks, Carrie. And I’ll just touch a little bit more on retail as well. If you look at duty-free, we’re in the process as Carrie mentioned of agreeing an extension until we complete the longer term duty-free retender, which is likely to take place in the second half of calendar 2024. And ballpark where that’s likely to land is we won’t have the same level of [MIQ] on a per PAX basis that we had pre-COVID. It might be off 15% to 20% of the heydays pre-COVID, so you can run those numbers very wide. And on OpEx, yes, FY2019 result was circa $190 million. We have experienced a lot of inflation since then and we’ve battled that through with the most recent budget round, you’re probably safe to assume that OpEx for FY2023 will be circa $200 million.
Wade Gardiner
$200 million?
Philip Neutze
Yes.
Wade Gardiner
Yes. Okay. Next question. Just on Slide 17, you’re talking about the debt covenants. Can you just remind us – you’ve still got the waivers in place? Can you – what do you need to do to get back to dividend paying? My understanding was the waivers need to go, or is it a case of getting to a certain level of interest cover, which I think you are already sort of well above where those waivers are?
Philip Neutze
Yes. Good question. Thanks, Wade. I think everybody needs to understand that we’re not under any covenant waivers now, we’re out of that. And the quid pro quo for negotiating more relaxed covenants back in February is that the dividend block was extended. It was previously through 31 of December 2021. It’s been extended to 31 of December, 2022. So there won’t be a dividend for the first half of FY2023. The first dividend that we could pay would be for the second half. The other minor qualification that was a result of those negotiations with the banks is an absolute block on dividends being paid from anything other than underlying profit.
For example, let’s say, we had underlying profit of a $100 million, but reported profit of $500 million. We wouldn’t be able to pay a $500 million dividend, but we wouldn’t do that anyway because that’s not our dividend policy. Our dividend policy has always been based on underlying profit, but that restriction will continue forward until we start to deliver EBITDA interest coverage that exceeds 3.0x, or by December 2024, whichever was the earliest.
Wade Gardiner
Okay. Yes. That’s all for me. Thank you.
Carrie Hurihanganui
Thanks, Wade.
Operator
[Operator Instructions] Our next question comes from the line of Amit Kanwatia from Jefferies. Your line is open.
Amit Kanwatia
Good morning, all. Just a couple of questions for me. Firstly, on the outlook now. Appreciate you provided a range of $50 million to $100 million of underlying profit. And I think your passenger forecast is pretty specific, international at 60%, domestic at 80%. Can you talk to if that profit range is – I mean, if the passenger forecast, I mean, what does that equate to as far as your profit is concerned? Would that be at the midpoint, low point or I mean, at the high point?
Carrie Hurihanganui
Yes. Thank you. I’ll let you to pick that up, Phil.
Philip Neutze
Yes. So that’s the midpoint of the range and…
Amit Kanwatia
Right.
Philip Neutze
Yes. I’ll come back on this call with just an estimate of sensitivity to a plus or minus 10% swing and PAX and MCTOW versus that. I just need to put – lay my hands on it, but I’ll come back to that shortly.
Amit Kanwatia
Okay. That’s all right. Just again, I mean, thinking about retail business, and I think you called out 45% of international retail is open 90%, domestic is open and again, passenger forecast is at 60%, you’re highlighting some [MIQ] pressures on retail. But what’s the level of retail store openings you see through the year on an average, would it be at 50%, 60% or can it get closer to 80% or 90% through the year?
Carrie Hurihanganui
Yes. Thank you. I’ll start with that. Some of those numbers I was referring to was as at 30 June. And so that has continued to increase. So we are currently sitting at 61% of the International Terminal open and over 95% of the domestic retailers open. So that’s as at August. Our expectation, we know that we’ve got further stores opening this month and they really continue to do so. So my expectation is as I said, we want to stay ahead of passenger demand. So I’d like to think that we’d be sitting, all things being equal at kind of 80% by the end of the calendar year, which again, that is keeping us ahead of that 70% capacity that we’re expecting. We can say as far as retail lease occupancy is at 30 June, internationally was at 94%. So we’ve had good occupancy remain. We’ve had a couple of new stores start.
From many of the retailers, the playback to us is really, it’s a matter of dealing with the labor shortage. So we’re a 20-hour a day, seven day a week operations for some operators that can open for restricted hours. For example, some are opening for one shift until they hire more staff to get to two shifts than otherwise. But I am optimistic that we will continue to see the openings pickup. I probably can’t give you just because it’s not something that we can specifically control our influence is an absolute date, but I would be comfortable saying targeting 80% by the end of this calendar year would be the space I would see us in.
Philip Neutze
And perhaps I’ll just jump in with that sensitivity. In fact, our guidance range reflects a sensitivity of plus or minus 10% in both passenger numbers and MCTOW.
Amit Kanwatia
Yes. Okay. That’s very useful. Just I mean, a couple of more questions. If I think about the CapEx, I mean, you’ve said CapEx is $600 million to $700 million for fiscal 2023. When was the last time you spent this kind of CapEx? I couldn’t see that. And secondly, if I think about in an article pricing negotiations, PSE4, and I think in the past, you said your big ticket items like domestic terminal as well as the transport hub. I think that’s included in PSE5. So can you give us a sense of what the kind of CapEx that could be included in the PSE4 pricing? I know I appreciate it’s in the negotiation, but just kind of broader sense?
Carrie Hurihanganui
Well, I think you had two questions there. I think the first question, if I caught that right, I was to say, when is the last time we’ve invested this volume of CapEx. And to my understanding, whilst I’m new kid on the block, somewhat my understanding is we haven’t – the highest is probably historically been 400 on that piece. So we are moving above historic in that space. In terms of your question around PSE4 and what is included in that pricing. Phil, are you able to give some insights into the PSE4 versus PSE5? Because some of these projects obviously were commencing construction, one is around delivery versus it actually.
Philip Neutze
Yes. That’s right. So the likes of the integrated domestic terminal will not be in the [raven] PSE4, as we’ve indicated that’s a $1 billion plus project, but there is a range of airfield work, particularly aircraft stands that will be delivered progressively over that time. There’s ongoing roading network CapEx. There’s quite a range of utilities, so power, gas, water that will also be included there and those extensive renewals, particularly in relation to the existing domestic terminal that we need to up the service quality from that asset. So there will be significant CapEx in that asset over that time as well, and there are a number of other areas.
Amit Kanwatia
Right. And just lastly, justify if I can ask on the property business, I think you’re highlighting, some rental increase pricing growth in the property business during the year. I mean, I just wanted to get a sense of what’s the kind of pricing growth you are expecting for fiscal 2023 on the property side?
Philip Neutze
Yes. I’m struggling for the terminology actually at the moment. Rent roll, sorry, gives you an indication. If you compare rent roll to annual rental, it shows you the rent that will be – that we’re expecting from property developments that are assigned up as of today. Now we expect that momentum to continue as well. So during FY2023, we’ve got an active pipeline. So we’ll add to that further, but that gives you a bit of a sense of that.
Amit Kanwatia
Fair enough. That’s all.
Operator
Thank you. [Operator Instructions] Our next question comes from the line of Andrew Steele from Jarden. Your line is open.
Andrew Steele
Good morning, everyone. Just the first one for me is on your cost base. I was hoping you could clarify what the inflation assumption is. It’s implicit in the $200 million of expected OpEx next year. And are there any key areas of cost pressure that you’d like to call out?
Philip Neutze
Yes. Thanks, Andrew. Most of those based on costs as of today, which of course has got three or four years of inflation versus FY2019 already embodied in that. And we are using – to the extent that we use CPI, it’s well above the reserve bank’s target, so 4% to 5%. And sorry, what was the second part of your question?
Andrew Steele
And any key areas of cost pressure within the cost base?
Philip Neutze
Yes. So the areas that we’re expecting the greatest increase in OpEx in FY2023, our personnel costs. Naturally, we are rebuilding the team and we talked about being, at least slightly ahead of the curve, what our resourcing versus expected PAX recovery. Repairs and maintenance, we continue to move to a more proactive stance there, particularly taking advantage of having lower PAX numbers through the airport at the moment. Insurance continues to tick up. Rates, that’s a big one for us. So we are budgeting on a $11 million increase in rates for FY2023 that’s versus a $15 million rates expense in FY2022. So that’s absolutely huge
And then the likes of outsource operations is reasonably significant. So that’s management of our car parking, which were progressively opening landside busing, and that includes some bus transfers with closed Carpark A, so a lot of people parking Carparks D and E. There’s a bus shuttle service from there to international terminal as well as park and ride and we’re restarting Strata Lounge. So those things come through outsource operations. That’s all in the airport management maintenance and operations line that you see. Other areas, marketing and promotions were starting to dial that up a bit again, and ongoing increases in technology costs.
Andrew Steele
Great. Thanks, Phil. And just one in terms of the – I guess, the operations of the business into 2023. Are you seeing any emerging operating constraints or bottlenecks? You have noted sort of bringing personnel cost ahead of recovery, and I guess what other actions are you taking to avoid some of the capacity constraints that have been evident in some of your major offshore peers?
Carrie Hurihanganui
Yes. Thanks. Andrew, I’ll take that. And I think absolutely, been part of what Phil was alluding to is, is we have consciously taken leaned into staying ahead of the curve in regards to what we anticipated demand to be. I think thus far that served us well, that whilst hasn’t been perfect, but we have avoided some of the challenges that you’ve seen play out globally. We’re continuing on that trajectory. Some of the actions we’ve taken I think it was two or three weeks ago, we had job fair, which was not only to ensure that we can remain ahead of the curve of our recruitment requirements across operations, infrastructure and the like, but also the wider airport precinct and the ecosystem because we can have all the stuff in the world, if ground handlers don’t or border agencies don’t or airlines don’t, we’re now further ahead.
So we continue to work really closely with our aviation partners in that space. And thus far it is tracking well. We’ve had things such as coming out of the back of that job fair, 3,500 people go through that day and playback from a number of those partners that they have hired as a result of that. So at this point, we’re positive, but as the OpEx figures show, we are trying to ensure that we’re not reacting and that we are proactive in that space.
Andrew Steele
Great. Thank you, Carrie. And just the last one for me. I guess it’s potentially a bit more of a clarification regarding the comments on [MIQ] earlier. So is it fair to assume that from what you said that MIQ will be turning – effectively turning back on in 2023, but at a level lower than where they were pre-COVID at 15% to 20%. Was that right, Phil?
Philip Neutze
Yes.
Andrew Steele
Excellent. That’s all for me. Thank you.
Operator
Thank you. [Operator Instructions] Our next question comes from the line of Alexander Prineas from Morningstar. Your line is open.
Alexander Prineas
Thank you. Just thanks for the information around those capacity constraints and how you are sort of dealing with them. I was just interested in a bit more detail on that. Perhaps if you could comment on how much – in terms of the most pressing capacity sort of challenges, is that more related to kind of global issues, such as number of pilots, number of airplanes that is sort of a global capacity constraint? Or is it are the most pressing constraints that the local ones that can be solved in Auckland? Yes, can you comment on that?
Carrie Hurihanganui
Yes. Thanks, Alexander. I mean, the issues certainly are global. We’re seeing and feeling that. I think as far as managing locally is certainly the priority. You look and quite often airlines will use if Air New Zealand – the home carriers well though use third-party providers, for example at out stations and are managing through that. So whilst there is an issue that’s bubbling away, it is more of a local piece that as airlines are launching out of NZ and things like the ground handling capability and really just volume through the airport, whether that be Auckland Airport staff, or border agency staff. So I would say while on balance, I would say the focus is, is primarily local and hence why things like the job period were important to say, how can we give that a bit of a shot in the arm to move that along and what we know is quite a tight labor market environment in the moment.
Alexander Prineas
Okay. Thanks.
Operator
Thank you. [Operator Instructions] Our next question will come from the line of [Nick Diaz] from RBC Capital Markets. Your line is open.
Unidentified Analyst
Thank you. Good morning, guys. Thanks for the call. Just a couple of questions for me. The first one is just on dividends and fully recognizing that you’re obviously having a balance and expensive CapEx program against the possibility of a return to dividends. I pose two questions. Do you mind just reminding us exactly of your dividend payout or your method of paying out dividends and then separately, I suppose, knowing what you do know, what your sense is on the possibility of a return to dividend payments?
Philip Neutze
Yes. Nick, I’ll cover that. So the current policy is to pay circa 100% of underlying profit after tax. So that excludes any revaluations that might bolster or reduce our reported profit. And in simple terms, it means that what we can pay is profit, but it means that depreciation is effectively held to fund some of our CapEx. So it’s not a cash flow type approach that Sydney Airport used to follow, for example. And return to dividend, yes, the return to dividend payments is expected.
As I mentioned, there’s an absolute block until after December this year. So the first payment would be our final dividend that gets paid in October. So that will be October next year. And we are – the Board has asked management to look into dividend policy. Are there any lessons learned around COVID for example. So we will be looking at that I’d note that we’ve previously had a dividend reinvestment plan, that’s reinvested 20% to 25% of dividends.
Pre-COVID, our total profit was $275 million, so that was our maximum dividend payout in the year. You can see that tweaking at the margin that dividend policy won’t free up an awful lot of extra cash versus our forecast CapEx going forward. Our guidance of $600 million to $700 million for FY2023 is a sensible basis to be thinking longer term at the moment until we complete our CapEx consultation. So you can see that dividend policy can’t make an awful lot of difference there, but there is a possibility that the Board might seek to just scale that back slightly. I don’t know. We’ve got to work through that.
Unidentified Analyst
Yes. Fantastic. That’s very helpful. Thank you. And then separately, just on your rent roll, I think you mentioned that your average lease is 9.4 years. Correct me if I’m wrong. I guess my question would just be how regular your rent prices go up or how often they are reviewed? I would imagine that they do inflate perhaps with escalation, but I’m just interested around the mechanics there, please.
Carrie Hurihanganui
Yes, absolutely. And generally, I mean, again, each contractors individual, but I would say generally two, but we might have some that go up to three, four years, for example, but I would say two would be the most usual.
Unidentified Analyst
Sure. Fantastic. Okay. Thank you very much.
Operator
Thank you. [Operator Instructions] Our next question will come from the line of Marcus Curley from UBS. Your line is open.
Marcus Curley
Good afternoon. Could we just start with, Phil, the CapEx on the non-aeronautical side. Could you give us any color around the total size for the transport hub and the retail outlet, which are probably driving the CapEx for this year and next year?
Philip Neutze
Yes. So Transport Hub in ballpark figures circa $300 million. There’s also a significant office development. That’s part of that. And the Manawa Bay Outlet Center circa $300 million.
Marcus Curley
And so how much would you be doing this year of that?
Philip Neutze
So the forecast delivery of that is mid-2024 for both of them. And for FY2023, we’ve got about $340 million across property and car parking, including the Transport Hub in Manawa Bay.
Marcus Curley
Great. And then just an extension of that, when you look at your carpark capacity, obviously there was a bit of news around being at maximum capacity there, when I look at the accounts, yes, public car parks down 23%, given what you’re having to do on the construction. How should we think about car parking revenue into this year coming? Do you think it’s going to be constrained because of lack of capacity?
Carrie Hurihanganui
I might start and Phil might have a view on that as well. I guess from my perspective, I mean, it is something that was that comment I made before about this propensity to drive, which is quite – the profile is quite different to what it was in a pre-COVID environment market. So we’re certainly watching that and trying dig around from insights perspective to get a handle on that being structural versus transitionary. But yes, with construction under way, we’re very cognizant of sequencing and trying to minimize the impact that we have to car parking and the time that has because it impacts a combination of clearly the customer experience and giving them options as well as the revenue impact. So it is something that the infrastructure teams are working through as part of the development and how we minimize that impact.
Philip Neutze
Thanks, Carrie. And big picture, of course, we’re early in the passenger recovery. So even with that Carpark A taken out, we’ve arguably got surplus capacity at the moment. So for FY2023, we’re not expecting capacity constraints to limit that growth in car parking revenue. In fact, we would expect to see both domestic and international car parking revenue increase by more than the passenger increase. And that just reflects the treatment we’re seeing at the moment with a greater propensity to driving your own cars, I guess, related to COVID as opposed to ride share or taxis.
Marcus Curley
Okay. And so the problems you had with the car parks being full, whether that’s been resolved?
Philip Neutze
So yes, I mean, there has been some issues at peak and the teams continue to work on that. I actually haven’t checked with them if that’s fully resolved. There might still be some challenges. But of course, this is a view across the entire year. So there might be some times that there’s some issues. I know the team is looking for solutions there.
Carrie Hurihanganui
And I can comment on that. Yes, there was a particular issue for school holidays, so it’s not a constant issue, but July school holidays were definitely a bumper school holiday period in something where we had issues, so the team is working to say, how do we manage and level load some of those peaks, but it is work in progress.
Marcus Curley
Okay. And then just on the airline recovery, I just wondered if you can talk a little bit to the airlines that haven’t returned, particularly outside of the Chinese ones for obvious reasons, but would you call out any airlines which you think are at risk or problematic at the moment or – I just wondered if you could talk a little bit to that?
Carrie Hurihanganui
Yes. Most certainly, and it is a little bit of a – it’s building slowly, but surely, I mean, we got things actually, Emirates recently was talking about the reintroduction of the A380s from later this year. So we are seeing those come back and play, which is fantastic. You’ve already highlighted the China market and the fact that put that to one side. We are seeing additional to some of the capacity, for example, that hasn’t come back on as yet would be Virgin. So Virgin has positioned themselves very clearly and focusing on the domestic Australian market as their primary focus. And so the view of whether they would come back to New Zealand beyond, for example, Queenstown, which I think they’ve indicated is limited. You’ve got some other airlines like Samoa, the Pacific Airlines that isn’t returning to flying, but outside kind of a handful of those elements.
In the China piece, we are seeing the desire return. We are seeing new announcements like AirAsia X, like American Airlines. We’ve had United reconfirms the plan to recommence San Francisco. So for some airlines, it is timing clearly getting into the summer peak. And for some, they’ve been a really clear thing as soon as we have the aircraft capacity or for example, pilot capacity, our intention is to return. We just don’t necessarily have absolute timeframes for some of those. But outside – and actually, I can’t remember the slide number, sorry, Marcus. There is a slide that has the map with the back to the future, one that I was talking to, which down the bottom, I believe does highlight the four or five airlines that at this point we don’t have a clear path of whether they will be returning again or not.
Marcus Curley
Okay, great. That’s handy. And then just finally, sorry, Phil, to sort of go back on this. But – so your comments around retail and the [MIQs] coming back, one interpretation of what you said was, that we take the peak level of retail revenue, which was 225, take 20% off it. And that’s sort of where you’re heading quite quickly, if the MIQs are coming back, or I would assume that’s not quite what you’re referring to?
Philip Neutze
Yes. I’m referring specifically to the duty-free component of that. As you know, we are still in discussions on how we extend the existing duty-free leases until we complete the full tender, which will be late calendar 2024. And what I’m saying is for duty-free, we should not expect that will be back to the same income per PAX that we experienced back in FY2019, that it’s likely to be off somewhere between 15% and 20%.
Marcus Curley
And that’s just – sorry, go ahead.
Philip Neutze
And then of course, the question is long-term, the reason why we are deferring that retender is because there’s so much uncertainty right now. We would be hopeful that the recovery from COVID is way more advanced, by the time that we undertake that tender and that we – because also the intention is to move to a single operator, when we complete that full retender, that it will be a lot stronger position than what we’re – what I’m just talking about over the next couple of years.
Marcus Curley
And so outside of duty-free, the other specialty retailer recovery will be more in line with passengers?
Philip Neutze
We’re working that through and I don’t have it at my fingertips, I think that’s fair assumption.
Marcus Curley
Okay. And could you give us any color on pre-COVID what duty-free was a percentage of retail?
Philip Neutze
Yes. Roughly two-thirds.
Marcus Curley
Great. Thank you.
Operator
Thank you. And I’m not showing any further questions in the queue. I’d like to turn the call back over for any closing remarks.
Carrie Hurihanganui
Fantastic. Well, thank you. Certainly, Phil and I appreciate you taking time out of your day to allow us to share FY2022 results. As I said, we sit here with a long-term view. We are incredibly optimistic about the future and are looking forward to that gaining momentum as we make our way through FY2023. Have a fantastic day to everyone that’s joined us, and we look forward to connecting again with you soon.
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