Auckland International Airport, the country's major gateway, raised its expectations for annual profit after first-half earnings rose 1.3 percent on increased passenger numbers and higher revenue from its retail and property divisions.

Underlying earnings, which strip out changes to investment and derivative valuations, rose to $87.8 million in the six months ended Dec. 31, from $86.7 million in the year earlier period, the Auckland-based company said in a statement. That was just ahead of First NZ Capital's estimate for $84.3 million. Net profit rose to $92.8 million, or 7.8 cents per share, from $85.9 million, or 6.49 cents, a year earlier. That included a $6.3 million gain in the value of its property portfolio. Revenue rose 5.4 percent to $251.4 million.

The airport operator lifted its forecast for annual underlying earnings to between $167 million and $174 million from a previous range of between $160 million and $170 million, due to growth momentum achieved in the first half.

"These results demonstrate that we have maintained our growth momentum of recent years," chairman Henry van der Heyden said. "We have continued to implement our strategy of growing travel markets, strengthening our consumer businesses, achieving operational efficiencies and investing in our property and long-term infrastructure."

The board declared an interim dividend of 7.3 cents per share, payable on April 2 with a March 19 record date. That's bigger than the 6.8 cents per share dividend First NZ predicted.

Auckland Airport today announced that LS Travel Retail Pacific and Aer Rianta International won the tender to operate the company's duty free retail from July 1, which it anticipates will add an extra $5 million in earnings before interest, tax, depreciation and amortisation in the 2016 financial year. They replaced DFS and JR Duty Free, who have previously operated the airport's duty free retail offerings.

The shares last traded at $4.385, and have increased 3.7 percent this year. The stock is rated an average 'hold' based on eight analyst recommendations compiled by Reuters, with a median price target of $4.09.

The airport's aeronautical division increased revenue 6.1 percent to $127.8 million for a 10 percent gain in Ebitda to $95.5 million. Its retail unit's earnings edged up 0.8 percent to $83.5 million on a 2.8 percent gain in sales to $93.3 million. The property division boosted revenue 10 percent to $26.8 million for a 14 percent gain in Ebitda to $20.8 million.

The airport lifted passenger movements 3.9 percent to 7.9 million in the six-month period from a year earlier, with international passengers up 4.4 percent to 4.3 million and domestic passengers rising 3.1 percent to 3.6 million. Aircraft movements fell 2.6 percent to 76,900.

Auckland Airport's share of profits from associates increased 11 percent to $5.4 million, led by a 23 percent gain to $1.2 million from Queenstown Airport and a 15 percent gain to $3.7 million from North Queensland Airports. Its share of profits from the Novotel hotel dropped 19 percent to $600,000.

The airport's cash flow from operations rose to $98.4 million in the half from $95.6 million in the same period a year earlier. It had cash and equivalents of $43 million as at Dec. 31.