CASA recorded an operating deficit of $1.8 million in 2011–12, compared to a $1.2 million deficit in 2010–11. The difference of $0.6 million reflects the overall result of an increase in income of $5.3 million and an increase in expenses of $5.9 million. This was mainly due to an increase in funding, stemming from higher aviation fuel consumption, being more than offset by increases in expenditure, particularly in relation to increased staffing levels and the impact on long service leave provisions as a result of the reduction in the 10-year government bond rate.
In 2011–12, CASA’s operating result was $2.7 million less than the revised estimate as published in the 2012–13 Portfolio Budget Statements. The actual operating deficit was $1.8 million, compared to an estimated deficit of $4.5 million. The variance to the estimate was primarily due to an underspend in supplier expenses.
Table 1compares the actual audited results for 2011–12 to actual audited results for 2010–11 and to the budget estimates.
a Budget figures are 2011–12 estimated actuals based on the figures published in the 2012–13 Portfolio Budget Statements.
The increase in 2011–12 income was primarily associated with an increase in aviation fuel excise revenue due to an increase in consumption of aviation jet fuel. There was no increase in the aviation fuel excise rate for 2011–12.
Figure 1 shows the change in income from 2010–11 to 2011–12 and compares actual results to budget estimates for 2011–12.
Figure 1 Actual revenue for 2010–11 and budget estimates and actual results for 2011–12
In 2011–12, approximately 65 per cent of CASA’s income was from aviation fuel excise (63 per cent in 2010–11) and 25 per cent was from government appropriations (26 per cent in 2010–11). The remainder of 2011–12 income was derived from the sale of goods and rendering of services, interest and other minor sundry revenue (see Figure 2).
Figure 2 Sources of income 2011–12
Total expenses in 2011–12 were $5.9 million more than in 2010–11. This is primarily attributable to additional staffing levels required to deliver CASA’s outcome.
Figure 3 shows the change in expenses from 2010–11 to 2011–12 and compares actual results to budget estimates.
Figure 3 Actual expenses for 2010–11 and budget estimates and actual results for 2011–12
In 2011–12, CASA spent approximately 60 per cent of total expenditure on employee costs (56 per cent in 2010–11) and approximately 34 per cent on suppliers (35 per cent in 2010–11). The remainder largely comprised depreciation and amortisation expenses (see Figure 4).
Figure 4 Expenditure 2011–12
CASA’s cash balance (including short-term investments) at 30 June 2012 was $51.9 million ($63.5 million on 30 June 2011). The decrease in the cash balance is represented by net cash generated from operating activities ($3 million), offset by cash used by investing activities ($14.6 million), mainly attributable to purchases of property, plant and equipment, and intangibles.
The cash balance provides funding for CASA’s capital replacement program, in line with its capital management plan. The cash balance also provides for the estimated future payments to be made in respect of services provided by employees (that is, employee provisions for leave entitlements).
Key indicators of the health of CASA’s financial position are its ability to sustain its asset base, the ability to pay debts as they fall due in the short term, and the maintenance of prudent levels of long-term liabilities.
The ability of CASA to sustain its asset base is indicated by changes in net assets. The decrease in total liabilities in 2011–12 was primarily due to the payment in full of all accounts payable invoices before the end of the financial year, in preparation for the launch of a new financial management information system. This reduction was offset by a comparable reduction in cash and cash equivalents. Figure 5 shows that CASA maintains a sustainable net assets level in relation to 2011–12 and forward estimates.
Figure 5 Financial position 2010–11 to 2015–16
CASA is budgeting for a break-even position in 2012–13, followed by small surpluses in the forward years 2013–14, 2014–15 and 2015–16.
The budgeted financial position for the financial year ahead is based on the expectation that revenue will remain flat while expenses are reduced through the implementation of a number of cost-saving strategies.
CASA’s total forecast income for 2012–13 is $174.4 million, and is derived as follows:
- $42.7 million from government appropriations
- $111.9 million from the aviation industry, through the collection of excise revenue on aviation fuel used in domestic air travel
- $15.0 million from regulatory services provided to the aviation industry
- $2.1 million from the sale of goods and services and other sundry income
- $2.0 million from interest from investment and cash deposits
- $0.7 million in payments from the Department of Infrastructure and Transport in support for the Indonesian Transport Safety Assistance Package.
CASA’s balance sheet projection shows a steady increase in net assets in the forward years. CASA’s strong financial position indicates its capacity to deal with financial pressures.
CASA’s cash and cash equivalents balance, including investments, are budgeted to remain above $50 million in the next four years. It is forecast that cash outflows will exceed cash inflows in 2012–13 because of a planned increase in capital asset acquisitions. In the forward years, net cash increases in 2013–14, 2014–15 and 2015–16 are expected, reflecting the expected growth in revenue projections for aviation fuel excise.
Retained surplus is budgeted to remain constant in 2012–13, but is expected to improve in the following years as a result of operating surpluses.