Published On: Sat, Apr 3rd, 2021

Report recommends external review of airport investments

PHILIPSBURG — The airport’s financial performance for fiscal year 2018 resulted in a 16.4 million guilders ($9.16 million) overdraft. The total bank withdrawal led to a 12.6 million guilders ($7 million) overdraft. “It is unknown how these facilities were managed during fiscal years 2018 and how a 12.6 million overdraft led to a total outstanding balance of 16.4 million guilders,” Curacao-based Ernst&Young Advisory writes in the airport’s confidential Financial Baseline Report that it submitted to PJIAE-CEO Brian Mingo on November 8, 2019.

The objective of this report was “to obtain a high level overview of the financial position per January 2019,” the month when Mingo started working for the airport.

The report recommends “an in-depth external review of all capital expenditures from 2012 forward to get a full understanding of the investments up to and including 2018 of more than 140 million guilders ($78.2 million) were justified.”

The airport had several CEO’s during the period the report refers to. From 2011 until 2015 this position was held by Regina Labega, who had to step down because she did not pass a screening by the national security service VDSM. Larry Donker succeeded her as acting CEO and held the position until April 2017. From May 2017 until the end of the year Michel Hyman functioned as interim CEO and in 2018 the position went to Chief Financial Officer Ravi Daryanani. Since January 2019 Brian Mingo is the CEO of PJIAE.

The report is far from complete because Ernst&Young did not receive all the information it requested. The researchers made approximately 85 requests for information, but 56 times (65.8 percent) they did not receive anything.

The researchers did for instance not receive information about bonus payments to the COO, CFO and CEO in the years 2017 and 2018 and they did not receive the minutes of management and supervisory board meetings over the same years. They also failed to receive an overview of the airport’s top suppliers in 2017 and 2018 and personnel statistics (like age groups and sickness). The researchers did not get an answer either to their question why the jubilee bonuses the airport paid in 2016 (2.8 million guilders or $1.56 million) and 2018 (3 million guilders or $1.68 million) were so high.

The report notes that in January 2019, the month when Brian Mingo started working for the airport, the cash reserves were zero.

The report contains a treasure trove of financial data. The airport’s revenue dropped from 113.3 million guilders ($63.3 million) in 2015 to 97.8 million ($54.6 million) in 2017 and 46.5 million ($26 million) in 2018 – a clear reflection of the impact of Hurricane Irma. The net result after taxes was in 2015 still positive: 8.9 million ($5 million), but it dropped into negative territory in 2017 (-54.4 million; $30.4 million) and 2018 (-4.9 million; $2.74 million).

The average number of employees at the airport is stable at around 270. Personnel expenditures were 28.9 million ($16.1 million) in 2015 and 26.5 million ($14.8 million) in 2018. The average annual salary per employee is 74,953 guilders ($41,873).

In 2015 the airport handled 864,917 passengers but in 2018 this number had dropped dramatically to 336,900.

The airport’s net profit margin in 2016 was just 8 percent, while other Caribbean airports did much better: Cayman Airport reported a 35 percent profit margin and Jamaica 44 percent. The net profit margin of Eindhoven Airport was 20 percent in the same year.

The report furthermore details the costs of the airport terminal building. The construction in 2006 cost around 180 million guilders ($100.5 million). During the fiscal years 2012 to 2016 the airport invested 130.9 million ($73.1 million) while it depreciated its assets by 110.9 million ($61.9 million). “Fifty percent of the fixed assets were depreciated in five years,” the researchers note. During the period 2013-2016 the airport invested 119.6 million ($66.8 million) in its capital improvement program. As stated above, the researchers recommend an independent investigation to determine whether all these investments were justified.

The report mentions that the construction of the terminal building in 2006 was financed through a bond loan of 213 million guilders ($119 million) against an interest rate of 8.75 percent. In 2012, when Labega was CEO, the airport refinanced the bond against better conditions: an interest rate of 5.5 percent. But because the bond loan itself increased the airport’s debt also increased: from 133 million guilders ($74.3 million) in 2011 to 244 million ($136.3 million) in 2012.

The report is critical of the full year-end bonuses the airport continued to pay “without a performance evaluation while PJIAE had hardly any liquidity to continue normal operations at the end of fiscal year 2018.” The total cost for these bonuses in 2018 was 2 million guilders ($1.1 million).


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