Fraport Interim Report 1st Quarter 2015: Fraport group achieves growth in revenue and operating result (EBITDA)
At its Frankfurt Airport (FRA) home base, Fraport AG recorded a rise in passenger figures in the first three months of 2015. Despite a number of strike and weather-related flight cancellations, passenger traffic at FRA grew by 2.7 percent to more than 12.5 million passengers. The cargo (airfreight + airmail) tonnage dropped by 2.4 percent year-on-year to around 500,000 metric tons. Passenger and cargo traffic at the Group’s airports outside Frankfurt also largely improved.
In addition to rising passenger traffic at its international airports, Fraport’s external business contributed to revenue growth due mainly to the first-time consolidation of two new Group subsidiaries – AMU Holdings Inc. (Airmall) and Aerodrom Ljubljana – which were acquired in the second half of 2014. A currency effect resulting from the conversion of revenues gained at the Lima Airport subsidiary, from U.S. dollars into the Group’s standard currency (euros), also had a positive effect. With cash outflow for investments remaining almost level, Fraport’s free cash flow improved by €34.1 million to €65.2 million.
Commenting on the company’s growth in the first three months of 2015, Fraport AG’s executive board chairman Dr. Stefan Schulte said: “Our positive first quarter results were supported by ongoing growth in the retail segment and by strong performance from our international business. For the full year, we continue to expect passenger traffic to increase. At Frankfurt Airport, this will lead to higher revenue particularly in the Aviation and the Retail&Real Estate business segments. These figures provide confirmation of our outlook for the entire 2015 business year.”
Overview of Fraport’s Four Business Segments:
Aviation: Revenue in the Aviation business segment rose from €189.4 million to €200.4 million in the first three months of 2015, up 5.8 percent year-on-year. Despite a decline in employee figures, personnel expenses increased in the reporting period, due to higher collective wage agreements in the public sector and for aviation security services. In addition, expenses from non-capitalizable capital expenditure increased compared to the same period last year. Nevertheless, segment EBITDA slightly improved by €0.4 million or 1.3 percent to €30.7 million. Because of higher amortization and depreciation, the segment’s EBIT declined by €1.4 million to €0.2 million.
Retail&Real Estate: Revenue in Fraport’s Retail&Real Estate business segment reached €113.4 million in the first quarter of 2015 – an increase of €6.9 million or 6.5 percent compared to the first quarter of 2014. This growth in revenue can largely be attributed to the higher passenger traffic at Frankfurt Airport and, in particular, to the growing number of intercontinental passengers who typically make above-average purchases of retail goods while at the airport. In addition, the devaluation of the euro compared to many international currencies helped boost passenger spending at FRA. Thus, the key performance indicator “net retail revenue per passenger” climbed by 6.5 percent, from €3.69 in last year’s first quarter to €3.93 in the reporting period. Since expenses rose only slightly, revenue growth is reflected almost entirely in the rising segment EBITDA – which expanded by €6.7 million or 8.1 percent to €89.1 million. With amortization and depreciation increasing at a very moderate rate, the segment’s EBIT advanced by €6.4 million or 10.3 percent year-on-year to €68.3 million.
Ground Handling: In the first three months of 2015, the Ground Handling business segment recorded four percent growth in revenue, up €6.0 million to €154.7 million. This positive performance was driven by higher passenger figures, a rise in maximum takeoff weights (MTOW), and an increase in infrastructure charges. Personnel expenses in the segment markedly increased in the first quarter of 2015, reflecting the traffic-related higher need for manpower as well as pay increases under collective wage agreements. Despite higher personnel expenses, segment EBITDA improved by €2.7 million (up from minus €2.8 million to only minus €0.1 million), thanks to positive revenue growth. With depreciation and amortization expenses up only slightly, segment EBIT improved to minus €9.5 million – an increase of €2.4 million year-on-year.
External Activities&Services: Fraport AG’s External Activities&Services business segment achieved significant growth in revenue in the first three months of 2015, soaring from €75.1 million to €107.4 million, up 43.0 percent. Adjusting for the recognition of earnings-neutral capacitive capital expenditure (in connection with the application of the IFRIC 12 accounting standards), segment revenue still climbed by 42.8 percent year-on-year, from €72.7 million in the first quarter of 2014 to €103.8 million in the reporting period. In addition to traffic growth at Lima Airport, first-time consolidation of the Group’s new companies – AMU Holdings Inc. and Aerodrom Ljubljana (acquired in the second half of 2014) – resulted in additional segment revenue of €20.2 million. The conversion of revenues gained at the Lima Airport subsidiary, from U.S. dollars into the Group’s standard currency (euros), also had a positive effect on the segment’s revenue. Operating expenses increased during the reporting period, mainly due to the first-time consolidation of the new AMU and Aerodrom Ljubljana subsidiaries, as well as reflecting currency and traffic-related effects at Lima Airport. Due to positive revenue growth, the segment’s EBITDA improved by €8.8 million or 35.8 percent to €33.4 million. Higher depreciation and amortization, resulting primarily from the new AMU Holdings Inc. and Ljubljana Airport subsidiaries, led to segment EBIT of €13.0 million. Compared to the first quarter 2014, this represents an increase of €3.4 million or 35.4 percent.
The Fraport Group Interim Report (January 1 to March 31, 2015) is available on the Fraport Website under “Investor Relations > Publications > Group Interim Reports” - www.fraport.com/en/investor-relations/events-und-publications/publications.html
MEDIA CONTACT: Fraport AG Frankfurt Airport Services Worldwide, Robert A. Payne, B.A.A. – International Spokesman and Head of International Press/PR & External Activities Team, Press Office (UKM-PS), Corporate Communications, 60547 Frankfurt, Germany; Tel.: +49 69.690.78547; E-mail: email@example.com ; Internet: www.fraport.com