Namibia Airports Company grows revenue to N$540 million but margins tighten as costs rise

Namibia Airports Company Limited recorded revenue growth but tighter profitability in the year ended 31 March 2025, as rising operating costs and depreciation weighed on margins despite stronger air traffic and disciplined cost management.

According to the company’s 2024/25 Annual Report, total revenue increased by 6% to N$540.2 million, up from N$516.2 million in the previous financial year.

The growth was underpinned by a steady recovery in both domestic and international air traffic, which lifted aeronautical income and provided a more stable revenue base following years of volatility in the aviation sector.

Aeronautical revenue remained the backbone of NAC’s income, contributing N$346.2 million, compared to N$326.2 million a year earlier.

Passenger service fees accounted for the largest share at N$254 million, followed by aviation security fees of N$50.5 million, landing fees of N$36.8 million, aircraft parking fees of N$3.9 million, and after-hours operations of N$1.1 million.

Aeronautical activities accounted for 64.1% of total revenue, reinforcing NAC’s dependence on flight volumes and passenger throughput.

Non-aeronautical revenue rose modestly to N$112.6 million, driven mainly by premises income and car rental activities amounting to N$64.6 million, alongside duty-free sales, concessions, fuel throughput, advertising, restaurants, parking and handling fees, which together contributed N$40.7 million.

Other operating income edged up to N$81.4 million, supported largely by N$71.3 million in government grants amortisation and recoveries of water and electricity costs.

Higher operating expenses

Despite revenue growth, profitability came under pressure. NAC reported an operating profit (EBITDA) of N$163.7 million, representing a 17% decline compared to 2024.

The contraction reflects higher operating expenses and increased depreciation linked to infrastructure assets, even as revenues improved.

Importantly, performance still exceeded internal expectations. EBITDA came in well above the budgeted N$31.1 million, supported by a N$87.1 million revenue over-performance and N$24.4 million in cost savings against budget. This indicates that while margins narrowed year-on-year, financial management remained tighter than planned.

Operating expenditure increased to N$585.1 million, from N$512.7 million in the prior year, but remained within the approved budget ceiling of N$606.7 million.

Personnel costs were the largest component at N$231.9 million, followed by depreciation, impairment and amortisation of N$187.5 million, administrative costs of N$139.3 million, maintenance and repairs of N$22.4 million, and a N$3.9 million provision for doubtful debts.

The rise in depreciation reflects NAC’s heavy infrastructure footprint and ongoing capital investment. During the year, the company invested N$81.1 million in capital projects aimed at modernising airport infrastructure. As a result, the carrying value of property, plant and equipment declined from N$2.135 billion to N$2.037 billion, primarily due to depreciation charges. NAC also recognised a Right-of-Use Asset of N$5.1 million in line with IFRS requirements.

Liquidity remained solid, though slightly weaker than the previous year. Cash and cash equivalents declined to N$284 million, down from N$295 million in 2024, leaving NAC with sufficient headroom to meet short-term obligations and fund ongoing infrastructure needs. The company also received N$21 million in capital funding, earmarked for key development projects.

Receivables remain a structural challenge. Gross trade receivables stood at N$887.6 million, of which N$798.1 million — largely linked to legacy debts from Air Namibia, South African Express and British Airways-Comair — had already been fully impaired in prior years.

Excluding these high-risk accounts, recoverable receivables amounted to N$89.5 million, with N$19.8 million overdue by more than 120 days. NAC collected 92% of its total revenue during the year and continues to tighten collection mechanisms.

Financial ratios point to improving stability but thinner margins. The net profit margin declined to 1.8%, down from 7.9% in 2023/24, while return on assets stood at 0.4% and return on equity at 0.8%. Liquidity remained strong, with a current ratio of 2.39, and leverage improved slightly, with the debt-to-equity ratio falling to 117.8%.

While NAC remains operationally resilient and financially disciplined, the figures underline the challenge of converting traffic recovery into sustained margin expansion in a capital-intensive aviation environment.