Sydney Airport Share Price Down After Scrapping Dividend (ASX:SYD)

Sydney Airport Holdings Pty Ltd [ASX:SYD] released its November foot traffic data today. According to the company’s numbers, domestic travel is down a whopping 87% for the month compared to the same month last year…even with the New South Wales-Victorian border opening up.

To be fair, the border only opened on 23 November. That’s why, in the words of the company, the numbers are showing a ‘modest’ recovery. So we’ll likely see better numbers next month.

Not surprisingly, international numbers are even worse

International travel is down 97% for the month compared to November 2019. And it’s likely to stay low for a while. As the company noted:

The downturn in international passenger traffic is expected to persist until government travel restrictions are eased.

The top nationality of people coming through the airports is Australian, as Aussies continue to return home.

Total passengers for November (both domestic and international) were 350,000. That’s quite a drop (91%) from the 3.7 million who passed through the airport in November last year.

You can clearly see the massive drop in foot traffic in the chart below. Compare the numbers from April, when passengers dropped to 93,000 a month, to the approximate four million in December last year.

Sydney Airport Air Traffic Numbers

Source: Sydney Airport

Year to date, the airport has seen 10 million passengers go through its doors, a 74% fall from the 40 million it saw this time last year.   

What could happen next the Sydney Airport share price?

The impact from the pandemic is showing in the company’s numbers.

For its half year results, SYD registered a loss after tax of $53.6 million, compared to the $17.3 million profit it clocked for the same period last year, along with a 36% decrease in revenue.

The company did manage to buff up its balance sheet earlier this year through a $2 billion equity raising. But with SYD still suffering from the impact of the pandemic, it has announced it is cancelling the final 2020 dividend.

The SYD share price had dropped 1% at time of writing, trading at $6.57. The truth is, the news wasn’t a huge surprise, as cancelling the dividend had already been flagged in August.

The pandemic and subsequent lockdowns have hit the travel industry particularly hard, so if you looking for dividends it may be better to look elsewhere. Why not check out our free report, ‘Five Dividend Stocks Set to Thrive in the Post-Pandemic Era’ You can access it here.

Best,

Selva Freigedo,

The Rum Rebellion


Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.


The Rum Rebellion