CASA recorded an operating deficit of $5.5 million in 2014–15, compared to a $4.2 million deficit in 2013–14. The difference of $1.3 million reflects the overall result of a decrease in income of $3.1 million offset by a decrease in expenses of $1.8 million. This was mainly due to a reduction in aviation fuel excise receipts and a decrease in employee benefits expenses.
In 2014–15, CASA's operating result was $2.7 million more favourable than the revised estimate published in the 2015–16 Portfolio Budget Statements. The actual result was a deficit of $5.5 million, compared to an estimated deficit of $8.2 million. The variance from the estimate was primarily due to higher than expected aviation fuel excise receipts of $2.5 million offset by lower than expected regulatory service fee income of $0.8 million, together with lower than expected employee expenses of $0.4 million and lower than anticipated depreciation and amortisation charges of $0.6 million. Table 1 provides further details.
Table 1 Comparison of actual results for 2014–15 with 2014–15 budget and 2013–14 actual results.
|Actual 2014–15 $m||Actual 2013–14 $m||Variance $m||Actual 2014–15 $m||Estimated actual 2014–15a $m||Variance $m|
a. Budget figures are 2014–15 estimated actuals based on the figures published in the 2015–16 Portfolio Budget Statements.
The decrease in income in 2014–15 was primarily associated with a decrease in aviation fuel excise revenue due to a decrease in sales of aviation jet fuel. There was no increase in the aviation fuel excise rate for 2014–15.
Figure 1 shows the change in income from 2013–14 to 2014–15 and compares actual results to revised budget estimates for 2014–15.
Figure 1 Actual revenue for 2013–14 and actual and budgeted results for 2014–15
In 2014–15, approximately 66 per cent of CASA's income was from aviation fuel excise (67 per cent in 2013–14) and 24 per cent was from government appropriations (23 per cent in 2013–14). The remainder was derived from the sale of goods and rendering of services, interest and other minor sundry revenue (see Figure 2).
Figure 2 Sources of revenue, 2014–15
Total expenses decreased by $1.8 million in 2014–15 compared to 2013–14. This was primarily attributable to a decrease in employee expenses, partially offset by an increase in supplier expenses.
Figure 3 shows the change in expenses from 2013–14 to 2014–15 and compares actual results to revised budget estimates.
In 2014–15, CASA spent approximately 63 per cent of total expenditure on employee costs (66 per cent in 2013–14) and approximately 30 per cent on suppliers (27 per cent in 2013–14). The remainder largely comprised depreciation and amortisation expenses (see Figure 4).
Figure 3 Actual expenses for 2013–14 and actual and budgeted results for 2014–15
Figure 4 Expenditure, 2014–15
CASA's cash balance (including short-term investments) at 30 June 2015 was $65.6 million ($66.2 million in 2013–14). The decrease in the cash balance was represented by net cash generated from operating activities of $8.0 million ($15.3 million in 2013–14) and a reduction of $0.7 million in net cash used by investing activities to $8.6 million ($9.3 million in 2013–14), attributable to decreases in 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, pay debts as they fall due in the short term, and maintain prudent levels of long-term liabilities.
The ability of CASA to sustain its asset base is indicated by changes in net assets. The net asset position decreased by $0.7 million in 2014–15. This reflected the fact that the deficit resulting from the operating result in 2014–15 was funded out of retained surpluses.
Figure 5 shows that CASA maintains a sustainable net assets level in relation to 2014–15 and forward estimates.
Figure 5 Financial position, 2013–14 to 2018–19
CASA is budgeting for an operating deficit position for 2015–16 of $10.0 million, with small operating surpluses in the forward years 2016–17, 2017–18 and 2018–19.
CASA's total forecast income for 2015–16 is $180.7 million, derived as follows:
- $42.5 million from government appropriations
- $118.6 million from the aviation industry through the collection of excise revenue on aviation fuel sold for domestic air travel
- $16.5 million from regulatory service fees plus the issue of Aviation Security Identification Cards
- $1.6 million from the sale of goods and services and other sundry income
- $1.5 million from interest from investments and cash deposits.
CASA's balance sheet projection shows a decrease in net assets for 2015–16 with modest increases in the forward years. The organisation's financial position indicates its capacity to deal with financial pressures. CASA's cash and cash equivalents balance, including investments, is budgeted to remain above $45 million in the next four years. In the forward years, net cash is expected to increase in 2016–17, 2017–18 and 2018–19. Aviation fuel excise, as published in the 2015–16 Portfolio Budget Statements, is expected to increase by 3.4 per cent in the forward years.
Retained surplus is budgeted to decrease in 2015–16, but is expected to improve in the following years as a result of operating surpluses.