Sri Lankan authorities give Dufry the go-ahead
The Sri Lankan cabinet has approved Bandaranaike International Airport (BIA)’s decision to award Dufry the second of two duty free contracts at the Colombo airport for five years. Dufry will be picking up the property that old acquisition World Duty Free used to run in competition with Flemingo international. This rivalry will continue too, as Flemingo was also granted a five-year contract at the airport earlier this year.
Dufry’s share price has appreciated by 22% so far this year
SOURCE: Yahoo Finance
Last year, Sri Lanka attracted more than 2 million tourists – that’s a 14% rise over the previous year. Presently, the new airport being built in the country should increase its capacity for travellers by 15 million, and Dufry’s new contract will carry over to this new building (providing it is completed in time – currently, the building is scheduled to finish by 2020).
On the company’s second quarter earnings call, about six weeks ago, Dufry’s CEO, Julian Diaz, mentioned the Sri Lankan tender specifically. He claimed that it was one of two factors influencing the company’s Division 3 (Asia, Middle East, and Australia) results, saying:
“What impacted the organic growth in the division has been the closing of Mumbai in India and Sri Lanka. This last one subject today to a tender process decision. We believe the decision will be reached during Q3. Ecluding Mumbai and Sri Lanka closings, the division performance, single-digit positive growth.”
However, including Sri Lanka and Mumbai, the division saw 1.5% contraction. No doubt, Dufry will be eager to turn that around going forward.
Dominion holds Dufry in its Global Trends Luxury Fund.
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