Dahaco beats the odds to post an increase in operating profits - The East African

Dahaco beats the odds to post an increase in operating profits

Monday March 14 2005

Special Correspondent

Despite the challenges in the avi- ation industry last year, the Dar es Salaam Airports Handling Company (Dahaco) recorded another substantial achievement by the end of the year.

The company's financial results show that turnover was TSh11.7 billion ($11.7 million), an increase of 14.8 per cent compared to the previous year. The operating profit, which amounted to TSh3.4 billion ($3.4 million) also increased by 2.8 per cent in the same period.

The company has proposed a final dividend of TSh896.6 million ($896,645) which is equal to TSh24.90 per share and a special dividend of TSh219.354 million ($219,354), equal to TSh6.10 per share. An interim dividend of TSh23.05 per share was paid in November last year.

According to the company's general manager Gaudence Temu, one of the major indicators in this performance is the increase in total dividend, from TSh50.56 per share in 2003 to TSh54.05 last year.

Mr Temu told The EastAfrican last week that although the net profit after taxation was TSh2.1 billion ($2.1 million) which is below that of 2003 by 5.2 per cent. The decline was mainly attributed to additional tax expense amounting to TSh382.6 million ($382,600).

He said traffic was on the increase although some airlines withdrew last year from the Dar International Airport.

"These were Air France, Egypt Air and Gulf Air. Otherwise our performance could have been better than this," he said.

Mr Temu said the substantial increase in fuel prices during the year that forced many carriers to look for ways of lowering costs had also affected Dahaco.

Increase in staff salaries also had an impact on Dahaco’s administrative costs, he said.

On May 30, 2000, Dahaco, three of its shareholders and the Tanzanian government signed a share sale agreement with Swissport, a company owned by Swissair, for the latter’s purchase of majority shareholding in Dahaco.

Under the agreement, Swissport acquired 51 per cent shareholding in Dahaco under a block share sale agreement with current shareholders – the government of Tanzania, Swedfund International AB (Swedfund), Scandnavian Airline Systems (SAS) and the Industrialisation Fund for Developing Countries of Denmark (IFU). The government of Tanzania previously owned 65 per cent of the shares in Dahaco through Air Tanzania Corporation (ATC), while Swedfund and IFU owned 10 per cent each and SAS 15 per cent.

The deal enabled Swissport to acquire the combined shares of the foreign shareholders plus 16 per cent government stake thus turning Dahaco into a private limited company with Swissport owning a total of 51 per cent and the government 49 per cent.

Dahaco was incorporated on April 27, 1984 providing ground-handling services to airlines at Dar es Salaam and Kilimanjaro airports. Swissport is specialised in airport handling with a worldwide reputation.

As part of the privatisation of Dahaco, the Swiss company signed concession agreements with Tanzania Airports Authority and Kilimanjaro Development Company in 2000. The agreement was for exclusive ground-handling services at Dar es Salaam International Airport for five years and Kilimanjaro International Airport for seven years.