Sydney Airport Holdings Pty Ltd (ASX: SYD) has released an update that investors should be aware of.

Sydney Airport Holdings is the company that operates the Kingsford Smith Airport, it currently has a 99-year lease on the airport but it will revert back to government ownership at the end of this century. According to Sydney Airport, it generates $30.8 billion in economic activity a year, which is equivalent to 6.4% of the NSW economy.

What Sydney Airport Announced

The airport business said that recent decisions by the Court of Justice of the European Union after finalisation of Sydney Airport’s December 2018 financials have prompted reconsideration of the status of indemnities provided by Sydney Airport (Trust 1 (SAT1)) in relation to the 2011 sale of Copenhagen Airport.

Work is continuing on this, including obtaining Danish legal advice, and the final position is not known yet.

Sydney Airport has assessed that some or all of the $119.1 million non-current receivable in the 31 December 2018 financial report relating to the indemnity previously paid may need to be expensed and a future call on its indemnities is possible, up to a maximum of $61 million at 30 June 2019.

What Does This Mean For Sydney Airport’s Profit?

The business is thinking about what will need to be shown in the 30 June 2019 interim report. Sydney Airport said that even if the indemnities are expensed and/or fully called it will have no material impact on Sydney Airport’s Net Operating Receipts in 2019 or later years and will not impact Sydney Airport’s distribution guidance of 39 cents per share in 2019.

The matters in dispute have not yet been finally considered by the Danish courts and a determination may be several years away.

I wouldn’t make an investment decision based on this news either way with how uncertain the items mentioned are.

However, I would rather invest in one of the reliable ASX shares below compared to Sydney Airport at the current prices.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.