Fraport Interim Report - nine months 2015: Financial and traffic results exceed expectations
Revenue growth was largely driven by strong passenger demand, as well as positive retail development at Frankfurt Airport (FRA) and the Group's international business. FRA's net retail revenue per passenger continued to improve noticeably year-on-year, from EUR3.27 to EUR3.49 per passenger. From January to September 2015, Frankfurt Airport welcomed a total of 47.3 million passengers - an increase of 3.6 percent, despite a number of strike and weather-related flight cancellations. FRA exceeded the 200,000 passenger-per-day mark on 58 days in the year to date - even registering a new daily passenger record on August 2, when some 217,500 passengers passed through Germany's gateway to the world. Frankfurt's cargo volume (airfreight + airmail, excluding transit cargo) decreased by 2.4 percent to about 1.56 million metric tons, mainly reflecting the overall weak global trade environment and a slowdown in emerging economies.
Commenting on the Group's positive performance during the first three quarters of 2015, Fraport's executive board chairman Dr. Stefan Schulte said: “With the trend of the first half continuing in the third quarter, both our traffic and key financial figures have developed positively in the year to date. Consequently, we have revised our outlook upwards for the entire 2015 business year."
Fraport now expects passenger traffic at FRA to grow by around three to four percent year-on-year, compared to the company's previous growth forecast of two to three percent. Furthermore, Fraport's executive board now expects Group EBITDA to range from some EUR840 million to EUR850 million and Group EBIT to range from about EUR520 million to EUR530 million. The Group result is forecast to reach a level of about EUR275 million to EUR295 million for the full year.
Overall, Fraport AG's international portfolio achieved positive performance in the first three quarters of 2015, despite varying traffic results across the Group's airports outside of Frankfurt.
The airports of Ljubljana (LJU) in Slovenia, Lima (LIM) in Peru, Hanover (HAJ) in northern Germany, and Xi'an (XIY) in central China achieved gains in passenger figures in the year to date. In contrast, the airports of Burgas (BOJ) and Varna (VAR) in Bulgaria, Antalya (AYT) in Turkey, and St. Petersburg (LED) in Russia experienced declining passenger volumes.
Overview of Fraport's Four Business Segments:
Aviation: Revenue in the Aviation business segment rose by five percent to EUR706.9 million in the first nine months, spurred by passenger growth at Frankfurt Airport as well as increased revenue from airport charges. Segment EBITDA grew only slightly by two percent to EUR201.7 million, as a result of higher personnel expenses and non-staff costs compared to lower other operational income. Also rising only moderately by 1.8 percent, segment EBIT reached EUR111.9 million in the first three quarters of 2015.
Retail&Real Estate: Fraport's Retail&Real Estate business segment saw revenue advance significantly during the reporting period, up by 6.5 percent to EUR356.8 million. The growth in revenue can be attributed to higher passenger traffic at FRA and, in particular, to the large number of intercontinental passengers making above-average purchases at FRA's shops and restaurants. In addition, the devaluation of the euro compared to many international currencies also helped boost passenger spending at Frankfurt Airport. Segment EBITDA expanded by 8.3 percent to EUR286.1 million, while segment EBIT soared by 10.7 percent to EUR223.7 million compared to the previous year.
Ground Handling: Driven by higher passenger traffic and a rise in maximum takeoff weights (MTOW), as well as an increase in infrastructure charges, revenue in the Ground Handling business segment grew by 4.4 percent to EUR517.8 million in the first nine months of 2015. Higher personnel expenses and lower other operating income could not curb the growth in segment EBITDA, which rose by 15.1 percent to EUR40.5 million. Segment EBIT also improved, albeit at a low level, growing by 34.7 percent to EUR9.7 million.
External Activities&Services: Revenue in Fraport AG's External Activities&Services business segment advanced by 31.9 percent to EUR385.8 million in the reporting period. Adjusted for recognizing earnings-neutral “capacitative" capital expenditure in connection with the application of the IFRIC 12 accounting standards, the segment's revenue grew by 31.7 percent to EUR375.6 million. Reasons contributing to the segment's satisfying performance included strong passenger growth at Lima Airport and higher revenues achieved at the Group's newly acquired subsidiaries: AMU Holdings Inc. in the U.S. and Aerodrom Ljubljana in Slovenia. 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. Segment EBITDA jumped by 28.9 percent to EUR160.2 million, while segment EBIT also grew similarly by 28.2 percent to EUR98.6 million for the nine-month reporting period.
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Fraport AG - which ranks among the world's leading companies in the global airport business - offers a full range of integrated airport management services and boasts subsidiaries and investments on four continents. In 2014, the Fraport Group generated sales of EUR2.4 billion and profit of about EUR252 million. Last year more than 108.5 million passengers used airports around the world in which Fraport has more than a 50 percent stake.
At its Frankfurt Airport (FRA) home base, Fraport welcomed about 60 million passengers and handled some 2.2 million metric tons of cargo (airfreight and airmail) in 2014. For the current winter timetable, FRA is served by 88 passenger airlines flying to 247 destinations in 100 countries worldwide. More than half of FRA's destinations are intercontinental (beyond Europe) - underscoring Frankfurt's role as a leading hub in the global air transportation system. In Europe, Frankfurt Airport ranks first in terms of cargo tonnage and is the third-busiest for passenger traffic. With about 55 percent of all passengers using Frankfurt as a connecting hub, FRA also has the highest transfer rate among the major European hubs.
Frankfurt Airport City has become Germany's largest job complex at a single location, employing more than 80,000 people at some 500 companies and organizations on site. Major new real estate developments - such as The Squaire, the Gateway Gardens business park, and the Mönchhof Logistics Park - are creating an exciting new dimension and range of services at the evolving Frankfurt Airport City of the 21st century.
Almost half of Germany's population lives within a 200-kilometer radius of the FRA intermodal travel hub - the largest airport catchment area in Europe. FRA Airport City also serves as a magnet for other companies located throughout the economically vital Frankfurt/Rhine-Main-Neckar region. Thanks to synergies associated with the region's dynamic industries, networked expertise, and outstanding intermodal transportation infrastructure, FRA's world route network enables Hesse's and Germany's export-oriented businesses to flourish in global growth markets.
Frankfurt Airport meets the increasing needs of the export-oriented economies of the State of Hesse as well as Germany as a whole, for optimal connections to growth markets around the globe. Likewise, FRA is a strategic gateway for companies wanting to access the huge European marketplace. Thus, Frankfurt Airport - which is strategically located in the heart of Europe - is one of the most important hubs in the global logistics chain.
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