The Ghana Airports Company Limited (GACL) was incorporated in 2006 and started operations in 2007. It was decoupled from the Ghana Civil Aviation Authority, and given the mandate to develop, manage and maintain all airports and aerodromes in Ghana.
Even though the company has been recording strong financial records and is profitable, profits have been declining.
The company is a group with subsidiaries. These subsidiaries are the Aviation Social Centre, Airport Clinic Limited, Air Commerce Forex Bureau Limited, ServAir Ghana Limited and Ghana Airport Cargo Centre Limited. Except ServAir and Ghana Airport Cargo which it holds 31 per cent and 18 per cent shares respectively, it has 100 per cent shares in the rest.
The company has also been given tax waivers by the government, it therefore does not pay corporate taxes to the Ghana Revenue Authority, according to the company’s Annual Reports for 2015 and 2016, the only periods for which reports are available on its website.
Notes on taxation in the financial reports for the periods available indicate that “the government of Ghana has waived the payment of corporate taxes to the Ghana Revenue Authority. In view of the waiver, the company’s policy of taxation is not applicable to this account. Consequently, no estimates have been made with regards to taxation. The receivable balance on the tax account represents taxes withheld by customers of GACL and thus represents valid tax receivables.”
When the company embarked on construction works at some of the airports, it applied for and was granted tax waivers by Parliament.
In 2018, the company applied for waiver of tax liability amounting to $14,926,809 (equivalent of GH¢81,257,072) on the purchase of materials and equipment for the Development of the Kumasi International Airport Phase II, by the Ghana Airports Company Limited/Contracta Construction UK Limited. The contract sum was agreed at €66.4 million.
Parliament in 2020 granted the company a $20,953,066.69 tax waiver for the purchase of materials, equipment and vehicles to construct the second phase of the Tamale International Airport.
The contract for the construction works Parliament, was between the Ghana government and QG Construction Limited, a United Kingdom (UK)-based construction firm with local presence in the sum of $70 million for the phase two.
Decrease in profits
The financial report for 2015 shows that the company’s profit after tax decreased from GH¢184.9 million to GH¢176.6 million representing a 4.3 per cent decrease in 2015 against the 2014 financial year. The decrease in profit was attributed mainly to increased operational costs.
“The gross profits increased by GH¢16.1 million. This was on the back of major revenue inflows (Airport Passenger Service Charge) being pegged to the dollar. The depreciation of the Ghana cedi contributed to this growth of revenue in cedi terms. GACL’s profit after tax however decreased from GH¢184.9 million to GH¢176.6 million representing a 4.3 per cent decrease in 2015 against the 2014 financial year. This was mainly due to increased operational costs. GACL has continued to pursue its strategy of strong liquidity position by improving on liquidity ratio from 1.19:1 in 2014 to 6.47:1 in 2015,” wrote the then Board Chair, Tony Lithur.
“The report for the year ended 31st December 2016, shows that the company posted profit after tax of ¢153 million representing a 13 per cent drop against the 2015 figures. Core revenue appreciated by 12 per cent but was eroded by the 38 per cent increase in expenses during the period.
GACL’s group financial report for 2016 full year indicates that profit dipped from GH¢177,2 million a year earlier to GH¢154.0 million representing a drop of GH¢23.2 million or 13.1 per cent,” wrote Oboshie Sai Cofie, the Board Chair at the time.
Financial debt structure
According to the report in 2015, the Board approved a long-term financing of up to $400 million to finance the company’s capital expenditure requirements.
“In determining the borrowing capacity of GACL, we conservatively relied on the Airport Passenger Service Charge (APSC) inflows only as security and the primary source of repayment for the loans,” the then Managing Director, Charles K. Asare wrote in 2015.
The Credit Facilities were to be used to fund certain infrastructural development projects at GACL’s airports.
He added further that the company’s financial model for raising the financing could adequately support a loan of $400 million under two separate components as follows: A Commercial Tranche of $250 million syndicated among eight Commercial Banks for a tenor of seven years with a grace period of two years, and interest rate of Libor plus a margin of 8 per cent p.a., and a Development Finance Tranche of $150 million to be syndicated among development finance institutions (DFIs) for a tenor of 15 years with a grace period of five years, and interest of Libor plus a margin of 5.5 per cent p.a
“This injection of funds contributed to the increase of GACL’s asset base from GH¢1.77 billion in 2014 to GH¢2.18 billion in 2015 reflecting a 21.9 percentage increase,” he said.
In September 2015, the Board of Directors of the African Development Bank (AfDB) approved a $120-million corporate loan to support the GACL’s capital investment programme.
The programme entailed the construction of a new terminal at Kotoka International Airport (KIA) in Accra, and rehabilitation of other airports in Kumasi, Tamale, Ho and Wa.
“The loan is the first private-sector investment that the AfDB has financed in Ghana’s transport sector,” the Bank said on its website.
Aircraft and passenger traffic
By the third quarter of 2021the GACL handled a total of 14, 978 international aircraft movement, and 12,110 domestic. In the same period, it handled a freight tonnage of 36,000. During the period the company recorded a total of 859,476 international passengers, 60,411 transit passengers and 514,446 domestic passengers.
The Kotoka International Airport Terminal 3 is designed to handle five million passengers a year.
By Emmanuel K. Dogbevi
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