Earnings before interest, tax, depreciation and amortisation rose to $1.11 billion in 2016, compared with $1 billion the previous year, in line with the $1.12 billion estimate of 13 analysts polled by Thomson Reuters I/B/E/S.

The company, which runs Australia's biggest airport, flagged it expects to pay distributions of 33.5¢ per stapled security in 2017, up from 31¢ for 2016, which was in line with analyst forecasts of 33.7¢.

International traffic, the main earnings driver for Sydney Airport, rose by 8.9 percent - the highest rate in 12 years - in 2016 as airlines added capacity. Overall, the airport was used by 41.9 million passengers in the year, up 5.6 per cent from 2015.

"We experienced double-digit growth in many of our major markets", said Sydney Airport CEO Kerrie Mather. "These included China, the United States, India, Korea, Japan and Indonesia."

Commenting on the prospects for the new airport on Badgerys Creek, the airport operator maintained there would be "significant challenges" in developing it without government aid, which is not on offer.

If Sydney Airport does not take up its development right, the government can build the airport itself or offer the development to other groups, such as pension funds and infrastructure funds, on the same terms they gave to Sydney Airport.

RBC Capital Markets analysts on January 31 said the government would need to offer at least $1 billion of funding to make the project attractive enough for Sydney Airport to develop it.

Federal Minister for Urban Infrastructure Paul Fletcher said in December the cost of the airport was expected to be around $5 billion to $6 billion. He said the airport would be open by 2026, regardless of whether Sydney Airport exercised its right to operate the facility.

Reuters