Duty-free troubles sink Airports of Thailand’s profit

Nicole Mezzasalma

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Court dispute with King Power affects profit for the financial third quarter

Airports of Thailand's (AoT's) net profit for the financial third quarter ended June 2007 plunged by 84% to Bt331m ($10.4m), down from Bt2bn ($62.8m) in the same period last year. The company said that despite an increase in traffic, a dispute over the management of duty-free shops greatly affected its performance.

AoT’s problems stem from a court case involving King Power International Group Thailand, which operates duty-free and other stores at Bangkok Suvarnabhumi airport. As King Power's concession has been suspended while the case is being decided, AoT has stopped reporting earnings from that source.

“A decrease in airports' commercial revenues stemming from the King Power case was the main cause of the drop in net profit, despite our foreign exchange gains,'” an AoT official told Thomson Financial. The company made currency exchange gains of Bt1.3bn ($40.8m) during the quarter. For the nine months to June, AoT’s revenue rose 12% to Bt13.7bn ($430.1m), even though its net profit plummeted by 82.9% to Bt1.55bn ($48.7m).