CASA recorded an operating deficit of $4.2 million in 2013-14 compared to a $12.0 million surplus in 2012-13. The difference of $16.2 million reflects the overall result of a decrease in income of $3.7 million and an increase in expenses of $12.5 million. This was mainly due to a reduction in other gains, a reduction in aviation fuel excise receipts and an increase in employee benefits expenses.
In 2013-14, CASA’s operating result deficit was $5.4 million less than the revised estimate as published in the 2013-14 Portfolio Budget Statements. The actual result was a deficit of $4.2 million, compared to an estimated deficit of $9.6 million. The variance from the estimate was primarily due to lower than expected employee expenses of $3.9 million, lower supplier expenses of $2.4 million and lower impairment of assets of $0.9 million offset by lower than expected aviation fuel excise receipts of $1.4 million and lower than expected regulatory service fee income of $0.3 million. Table 1 provides further details.
aBudget figures are 2013-14 estimated actuals based on the figures published in the 2014-15 Portfolio Budget Statements.
The decrease in income in 2013-14 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 2013-14.
Figure 1 shows the change in income from 2012-13 to 2013-14 and compares actual results to budget estimates for 2013-14.
Figure 1 Actual revenue for 2012-13 and actual and budgeted results for 2013-14
In 2013-14, approximately 67 per cent of CASA’s income was from aviation fuel excise (66 per cent in 2012-13) and 23 per cent was from government appropriations (23 per cent in 2012-13). 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 2013-14
Total expenses increased by $12.5 million in 2013-14 compared to 2012-13. This was primarily attributable to an increase in employee expenses.
Figure 3 shows the change in expenses from 2012-13 to 2013-14 and compares actual results to budget estimates.
Figure 3 Actual expenses for 2012-13 and actual and budgeted results for 2013-14
In 2013-14, CASA spent approximately 66 per cent of total expenditure on employee costs (63 per cent in 2012-13) and approximately 27 per cent on suppliers (29 per cent in 2012-13). The remainder largely comprised depreciation and amortisation expenses (see Figure 4).
Figure 4 Expenditure 2013-14
CASA’s cash balance (including short-term investments) at 30 June 2014 was $66.2 million ($60.2 million in 2012-13). The increase in the cash balance was represented by net cash generated from operating activities of $15.3 million ($23.0 million in 2012-13) and a reduction of $5.3 million in net cash used by investing activities to $9.3 million ($14.6 million in 2012-13), attributable to decreases in purchases of property, plant and equipment and intangibles.
The cash balance provides funding for CASA’s capital replacement, 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 $4.3 million in 2013-14. This reflected the fact that the deficit resulting from the operating result in 2013-14 was funded out of retained surpluses. Figure 5 shows that CASA maintains a sustainable net assets level in relation to 2013-14 and forward estimates.
Figure 5 Financial position 2012-13 to 2017-18
CASA is budgeting for a small operating surplus position for 2014-15, with operating surpluses in the forward years 2015-16, 2016-17 and 2017-18.
CASA’s total forecast income for 2014-15 is $187.5 million, derived as follows:
- $42.5 million from government appropriations
- $125.6 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, including payments in support of international assistance for Indonesia and Papua New Guinea
- $1.3 million from interest from investments and cash deposits.
CASA’s balance sheet projection shows a steady increase in net assets in the forward years. The organisation’s strong financial position indicates its capacity to deal with financial pressures.
CASA’s cash and cash equivalents balance, including investments, is budgeted to remain above $50 million in the next four years. In the forward years, net cash increases in 2015-16, 2016-17 and 2017-18. This reflects the expected growth in revenue projections for aviation fuel excise.
Retained surplus is budgeted to remain constant in 2014-15, but is expected to improve in the following years as a result of operating surpluses.