Fiscal year 2K18 of Fraport: considerable raise in income and profits

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 In the fiscal year 2K18 (which finished on December 31), Fraport AG maintained its development path, achieving new records in revenues and profits. With the backing of strong passenger development at its Frankfurt airport operations base and at the Group’s airports around the world, revenues raised by 18.5 percent to almost € 3,500M. 

After adjusting revenues related to capital expenditures for expansion measures in the Group’s international companies (according to IFRS 12), revenues raised by 7.8 percent to more than € 3100M. About two-thirds of this raise can be attributed to Fraport’s international portfolio, in particular, to airports in Brazil and Greece,

The chairman of Fraport AG’s executive committee, Dr. Stefan Schulte, commented: “We are happy to have registered another very successful year, especially for our Group airports around the world. However, here in Frankfurt, 2K18 posed challenges because of restrictions in European airspace and strong traffic demand. 

With regard to the medium and long term, we are very well positioned both at the airport in Frankfurt and in our international activities. In addition, we are laying the groundwork for further long-term development through the implementation of our expansion projects. “

Objectives of income and profits achieved

The operating result (group EBITDA) rose significantly by 12.5 percent to more than 1100M euros. The result of the Group (net profit) recorded an even greater raise that reached 40 percent to 505.7M euros. This includes the profits obtained from the sale of Fraport’s stake in the Hannover airport, which contributed 75.9M euros. However, even without the positive effects of the Hannover transaction, Fraport had already achieved its income and profit objectives. Operating cash flow suffered a slight decline of 2 percent, standing at 802.3M euros. This was mainly because of changes in net current assets related to the date of publication of the results. After the adjustment of these changes, operating cash flow raised by 18.8 percent to 844.9M euros. In line with expectations, the available cash flow fell sharply by 98.3 percent, because of the higher capital expenditures for the Frankfurt airport and Fraport’s international business, although it remained in positive territory with 6.8.Ms of euros.

Because of positive business development, the executive committee and the supervisory board will propose to the Annual General Meeting that the dividend is raised to € 2.00 per share for fiscal year 2K18 (fiscal year 2K17: € 1.50 per share).

Passenger traffic raises significantly in FRA and internationally

The Frankfurt airport (FRA), which served some 69.5M passengers, achieved a new passenger record in 2K18 and development of 7.8 percent contrast to 2K17.

Schulte commented: “We are happy that airlines have significantly extended their flight offerings at Frankfurt Airport for the 2nd year in a row, improving connectivity and prosperity for companies that are well beyond the Rhine-Main region of Frankfurt.

Until the first pier of the new Terminal 3 opens at the end of 2K21, we will focus on maintaining a high level of service quality at the Frankfurt airport, while dealing with the restrictions affecting the entire aviation sector. In particular, improving the situation at the security checkpoints will be one of our priorities. “

In response to the strong development of passengers, Fraport hired more than 3,000 new employees at the Frankfurt airport in 2K18. Despite the limitations practiced in some central points of the process in the terminals during the periods of maximum affluence, especially in the controls of safety, the overall satisfaction of passengers with the Frankfurt airport was 86 percent in 2K18, so it even registered a slight raise contrast to the previous year (2K17: 85 percent). In order to provide additional space for security checkpoints, Fraport is investing in an expansion of Terminal 1 to install seven additional security lines in the summer of 2K19.

Fraport’s international portfolio also registered a noteworthy raise in passenger traffic during 2K18. In Brazil, the two airports of Porto Alegre and Fortaleza registered a boost of 7 percent to 14.9M passengers in 2K18, the first year in which Fraport Brasil operated these airports. 

In the 14 regional airports of Greece, traffic raised by 9 percent to 29.9M passengers. The Antalya airport in Turkey registered a noteworthy raise of 22.5 percent to 32.3M passengers, a new historic passenger record.

Perspectives: development is expected to continue

Fraport foresees a sustained development in all the Group’s airports in fiscal year 2K19. At the Frankfurt airport, it is expected that the volume will raise between two and three percent about.

Fraport anticipates merged revenues to raise slightly to some 3,200M euros (adjusted according to IFRS 12). The EBITDA of the Group is expected to be between about 1160 and 1195M euros, despite the non-recurring income from the sale of Fraport’s stake in the Hannover airport. 

The application of accounting standard IFRS 16, which modifies the accounting rules for leases, will not only make a positive contribution to the Group’s EBITDA but will also lead to greater depreciation and amortization in fiscal year 2K19. As a result, Fraport anticipates the Group’s EBIT to be between 685 and 725M euros. 

The company also anticipates publishing a result of the Group (net profit) between 420 and 460M euros about. The dividend per share is expected to remain stable at the highest level of € 2 in fiscal year 2K19.

Summary of Fraport’s four business segments

Revenue in the Aviation segment raised by 5.5 percent to slightly above 1 billion euros. This was due in part to higher revenues from airport charges resulting from raised passenger traffic at the Frankfurt airport. EBITDA for the segment raised 11.3 percent year-on-year to 277.8M euros, while EBIT for the segment raised 6.5 percent to 138.2M euros.

The revenues of the retail segment and real estate registered a decline of 2.8 percent year-on-year to stand at 507.2M euros. One of the main reasons for this decline was that significantly lower revenues were obtained from the sale of land (1.9M euros in fiscal year 2K18 contrast to 22.9M euros in the same period of 2K17). 

On the other hand, revenues from parking (+ 8.3M euros) and revenues from retail sales (+ 0.8M euros) raised. Net retail revenue per passenger fell by 7.4 percent year-on-year to € 3.12. EBITDA for the segment raised by 3.4 percent to 390.2M euros, while segment EBIT raised by 2.8 percent to 302M euros.

Revenues in the Services on land segment raised 5.0 percent year-on-year to 673.8M euros. The strong development in passenger traffic generated, in particular, stronger revenues from terrestrial services and higher charges for infrastructures. On the other hand, passenger development also generated higher personnel expenses in the Fra-Ground and FraCareS auxiliaries. 

As a result, EBITDA for the segment was reduced by 7M euros, standing at 44.4M euros. The EBIT of the segment reduced significantly by 94 percent but still remained in positive territory with 0.7M euros.

Thomas Anderson

About Thomas Anderson

Thomas Anderson is a top contributor to The Health Post in both the GREAT IDEAS and Health section of the website. He has an MPH (MATER OF PUBLIC HEALTH) from Milken Institute School of Public Health at the George Washington University and an MD from University of Baylor.

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