Fraport Group Interim Release - Nine Months 2019: Fraport Reports Solid Revenue and Earnings Performance
Growth momentum slowing down – Outlook for full year 2019 confirmed
FRANKFURT AM MAIN, Germany, Nov. 6, 2019 /PRNewswire/ -- Fraport AG continued its growth trend in the first nine months of the 2019 business year, achieving an increase in both revenue and earnings. This positive performance was driven by solid traffic growth at Frankfurt Airport (FRA) and the Fraport Group's airports worldwide. However, the growth momentum has been slowing down during the year to date.
Fraport AG's executive board chairman, Dr. Stefan Schulte, said: "Our industry is being impacted by the weaker global economy and consolidation of the European aviation market. Furthermore, regulatory interventions by the German government - such as the planned increase to the national air traffic tax - are also affecting our sector. After a phase of rapid traffic growth, airlines are cutting back their plans and thinning out their winter schedules. Nevertheless, we are maintaining our full-year outlook for the 2019 business year - also backed by the ongoing positive performance of our Group airports worldwide. Thanks to Fraport's large and diversified portfolio of international airports, we are well positioned for the future."
International activities boost growth in revenue and earnings
In the January-to-September 2019 period, Fraport's Group revenue increased by 12.0 percent to €2,852.2 million year-on-year. After adjusting for proceeds related to expansion investments at the Group's airports worldwide (based on IFRIC 12), revenue rose by 5.2 percent to €2,486.7 million. At Frankfurt Airport, factors contributing to revenue growth included higher proceeds from ground handling services, airport and infrastructure charges, as well as security services. Retail, parking and advertising revenue also increased significantly. However, Fraport's international portfolio clearly continued to be the largest revenue driver. In particular, the Group company in Lima (up €30.5 million), Fraport Greece (up €25.4 million) and Fraport USA (up €21.8 million) contributed substantially to the Group's adjusted revenue growth.
The operating result or Group EBITDA (earnings before interest, taxes, depreciation and amortization) rose by 7.7 percent to €948.2 million in the nine-month reporting period. The first-time application of IFRS 16 had a positive effect on EBITDA, adding €34.0 million year-on-year. From the beginning of January 2019, the mandatory IFRS 16 international financial reporting standard establishes new rules for the accounting of leases - specifically affecting the accounting of lease contracts concluded by Fraport USA. At the same time, the application of IFRS 16 alone resulted in a €32.8 million increase in depreciation and amortization. Group EBIT saw a correspondingly moderate rise of 2.6 percent to €595.3 million. The Group result (or net profit) grew noticeably by 9.4 percent to €413.5 million. This was due to the improved operating result, as well as the markedly higher contribution from the Group subsidiary in Antalya, which is consolidated using the at equity method.
Solid traffic performance achieved despite slowing growth momentum
Passenger traffic at Frankfurt Airport advanced by a solid 2.3 percent to about 54.2 million travelers during the first nine months of the year. This growth momentum, however, decelerated noticeably over the course of the year. Based on current planning by the airlines, FRA will see a four percent reduction in the number of flights for the 2019/20 winter schedule (effective October 27) compared to the same schedule in the previous year. This reduction is due entirely to the 5.6 percent decline in European traffic, while scheduled intercontinental flights will climb by nearly 2 percent.
Fraport's Group airports worldwide also saw passenger traffic largely increase in the first nine months, despite some airlines reducing flight offerings or even filing for bankruptcy. Only at the Fraport Twin Star airports of Varna and Burgas, combined passenger traffic dropped noticeably by 11.6 percent year-on-year.
Outlook confirmed
Fraport AG's executive board is maintaining its full-year traffic outlook for Frankfurt Airport. Given the reduction in flight offerings for the current winter schedule, FRA's passenger growth is expected to reach the lower end of the forecast range of about 2 percent to 3 percent. The executive board is also maintaining the financial outlook for the full 2019 business year. Group EBITDA is expected to be reach between approximately €1,160 million and €1,195 million, while Group EBIT is forecast between about €685 million and €725 million. Group EBT is projected to be around €570 million to €615 million, and the Group result (net profit) between approximately €420 million and €460 million.
Print-quality photos of Fraport AG and Frankfurt Airport are available for free downloading via the photo library on the Fraport Web site. For TV news and information broadcasting purposes only, we also offer free footage material for downloading. If you wish to meet a member of our Media Relations team when at Frankfurt Airport, please do not hesitate to contact us. Our contact details are available here.
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Fraport AG
Torben Beckmann
Corporate Communications
Media Relations
60547 Frankfurt, Germany
Tel: +49 69 690 70553
E-mail: [email protected]
www.fraport.com
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SOURCE Fraport AG
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