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CASA Annual Report 2004-05 - Part 1: Overview of CASA

Part 1: Overview of CASA

Overview of Financial Performance

The following analysis is based on audited Financial Statements for 2003–04 and 2004–05 and Budgeted Financial Statements for 2004–05 contained in 2004–05 Budget Related Paper No.1.15.

 

Audit Result
Comparison
Original Budget Compared to
2004–05 Audit Result

 

2003–04
$m
2004–05
$m
Variance
$m
2004–05 Annual Budget
$m
2004–05 Audit Result
$m
Variance
$m

Revenue

110.9

122.8

11.9

114.7

122.8

8.1

Expenses

106.8

110.2

(3.4)

114.7

110.2

4.5

Operating Result

4.0

12.5

8.5

0.0

12.5

12.5

*Note that the table may not add exactly due to rounding.

The net operating result for 2004–05 was a $12.5m surplus which was an improvement on the break even 2004–05 Budget. The improvement was largely due to increased revenues ($8.1m) generated by increases in aviation fuel excise ($3.9m), miscellaneous revenue ($2.3m) and interest received ($1.3m), combined with decreased total expenditure of $4.5m largely attributable to savings in supplier expenses ($3.6m).

The operating surplus for 2004–05 was $8.5m higher than the 2003–2004 result, mainly due to increased appropriations and other revenues ($12m) offset by increases in expenditure ($3.4m). These movements are discussed further below.

Figure 2 Financial Performance Trends

Figure 2 Financial Performance Trends

Figure 2 shows that in 2005–06 CASA is initially expecting a decrease in revenue as a result of reduced government appropriations. From 2006–07 onward revenue is expected to increase due to the phasing in of the cost recovery programme. Expenditure is expected to rise slightly due to increased compliance activities.

Total Revenue

Figure 3 shows that for the financial year ended 30 June 2005, CASA received 53% of its total revenue from aviation fuel excise and 40% from Government appropriations. The remainder is derived from regulatory service fees, interest, and other sundry revenue.

Figure 3 Components of Revenue 2004–05

Figure 3 Components of Revenue 2004-05

Total revenue for 2004-05 was $122.8m, which was $8.1m higher than the original budget of $114.7m.

This increase is largely the result of the following:

  • aviation fuel excise ($3.9m) reflecting increased fuel usage;
  • insurance recoveries ($2.3m) due to unbudgeted insurance recoveries; and
  • interest received ($1.3m) due to increased cash balances.

Total revenue for 2004-05 was $11.9m (or 11%) higher than the 2003-04 result, due to increases in the following:

  • government appropriations ($3.4m) reflecting additional government funding;
  • aviation fuel excise ($4.1m) due to increased fuel usage;
  • increased other revenue ($2.5m) reflecting insurance recoveries ($2.3m); and
  • regulatory service fees ($1.7m) due to the commencement of the cost recovery programme.

Total Expenditure

Figure 4 shows that for the financial year ended 30 June 2005, CASA spent 63% of its total expenditure on employee costs and 32% on suppliers. The remainder largely comprises depreciation and amortisation expenditure.

Figure 4 Components of Expenditure 2004-05

Figure 4 Components of Expenditure 2004-05

Total expenditure for 2004-05 of $110.2m was $4.5m (or 4%) lower than the 2004-05 original budget of $114.7m, largely due to underspends in projects, as a result of timing slippages.

Total expenditure for 2004-05 of $110.2m was $3.4m (or 3%) higher than the 2003-04 result. This is largely attributable to increased employees expenditure of $2.2m due to increases in employer superannuation contribution rates for the CSS, PSS and AvSuper superannuation schemes.

Overview of Financial Position

Key indicators of the health of CASA's financial position are its ability to sustain its asset base, the ability to pay debts falling due in the short term, and maintaining prudent levels of longer term liabilities. The ability of CASA to sustain its asset base is indicated by changes in its net assets.

Figure 5 Financial Position Trends

Figure 5 Financial Position Trends

Figure 5 shows that at 30 June 2005 CASA's net asset position is strong as a result of increased cash balances following an operating surplus ($12.5m) and a revaluation of assets. From 2005-06 CASA's net asset position is expected to remain strong. However, it is expected to decrease initially, as cash balances are reduced to fund the Long-Term Funding Strategy. From 2006-07 onwards the net asset position is expected to increase due to the phasing in of the cost recovery programme.

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