Fraport Achieves First Quarter Profit Despite Crisis, Fraport AG

Release Date: 2009-05-12

Retail Revenue Exceeds €3 per Passenger – Forecast for 2009 is Cautious – Confidence for the Time After the Crisis

Despite the economic and financial crisis, which has considerably depressed world air traffic since the end of 2008, Fraport AG realized a profit for the first quarter of 2009: Unadjusted Group revenue fell by 14.4 percent year-on-year to €452 million. However, adjusted for consolidation effects, revenue decline was only 1.5 percent. EBITDA (earnings before interest, tax, depreciation and amortization) dropped by 13.5 percent below the previous year's level to €99.8 million. Group profit reached €22.3 million in the first three months of 2009, down 25.4 percent from the previous year's level. The Fraport Group expects to be in the black also for the full year 2009.

In the January-to-March 2009 period, approximately 14 million passengers used the Fraport Group's six majority-owned airports, 7.1 percent less than in the same period of 2008. Cargo tonnage fell by 23.2 percent to nearly 451,000 metric tons. The total number of passengers served by the Fraport Group's airports (including minority-owned airports and airports under management contract) slipped by 4.1 percent year-on-year to approximately 27.4 million and total cargo throughput slid by 18.1 percent to 657,300 metric tons. With 10.9 million passengers, Frankfurt Airport welcomed 10.9 percent fewer passengers in the January-to-March 2009 period than in the previous year and registered a 23.3 percent drop in airfreight and airmail to 407,000 metric tons of cargo.

The Fraport Group's revenue reached €452 million, down €76.2 million from the previous year's figure. Some €67.3 million of this loss were attributable to the sale of Fraport's ICTS Europe security subsidiary, which still generated income in the first quarter of 2008. Another €3.3 million were due to the transfer of Fraport's shares in Frankfurt-Hahn Airport to the state of Rhineland-Palatinate effective January 1, 2009, and the ensuing loss of income and expenses generated by this subsidiary for the Fraport Group in the previous year. In the reporting period, positive impulses were registered primarily at Lima and Antalya airports, whereas declining traffic resulted in a revenue loss of €22.5 million at Frankfurt.

Despite declining passenger traffic, FRA's retail and gastronomy offerings were increasingly attractive: Net retail sales revenue per passenger exceeded the €3 mark per passenger for the first time, climbing from €2.89 a year ago to €3.09.

Adjusted, total operating expenses rose 5.4 percent from €356.8 million to €376.0 million from January to March: Personnel expenses dropped by 20.4 percent below the previous year's level to €219.1 million, mainly because of the aforementioned consolidation effects. Adjusted, staff costs increased by €6 million or 2.8 percent, primarily because of the implementation of phase two of the collective pay settlement for Fraport AG's permanent staff agreed to in fiscal 2008. Because of the sale of ICTS Europe the number of people employed by the Fraport Group in the first quarter of 2009 dropped by 9,210 (down 31.4 percent) year-on-year to 20,131 employees on average.

Non-staff costs climbed in absolute terms by €4.6 million (or 3 percent) to €157.6 million. Main reasons included higher expenditures at Lima Airport as well as increased energy and utility costs due to the unusually cold 2008/09 winter.

Group EBITDA dropped by €15.6 million or 13.5 percent year-on-year to €99.8 million, mainly because of declining traffic at Frankfurt Airport and growing expenditures. The EBITDA margin slightly improved from 21.8 to 22.1 percent because of the elimination of the labor-intensive and low-margin ICTS Europe business.

Reaching €22.3 million, Group profits were down €7.6 million or 25.4 percent year-on-year. Basic earnings per share fell from €0.34 to €0.26.

Like in the first quarter, the global economic development will determine the outlook for air traffic development in the entire fiscal year 2009, and Frankfurt Airport will not be able to evade this development. Fraport expects passenger volume to shrink by between six and nine percent. Commensurate with this, the company expects Group EBITDA to reach approximately €500 million to €530 million. Group profits will fall short of the 2008 level as forecast at the beginning of fiscal year 2009.

Fraport's executive board chairman Prof. Dr. Wilhelm Bender explained he "continued to be optimistic with regard to the time after the crisis", despite the decline in traffic and profits anticipated for 2009. When presenting Fraport's interim report, Bender said, "Commencement of construction on the new runway set an important signal for the future viability and competitiveness of Frankfurt Airport and creates planning reliability for the airlines." With the completion of the new runway for the 2011 winter timetable, Frankfurt Airport and thus the entire Fraport Group will again participate at an over-proportionate rate in the catch-up effects of rebounding world air traffic that set in after every crisis, as experience has demonstrated. "We are making profit, do not require any government subsidies and, with €4 billion, are accomplishing a gigantic private investment program for FRA's expansion," Fraport's CEO said confidently.

Type:	NORMAL
Company:	Fraport AG
Url:	http://www.fraport.com/cms/press_center/dok/354/354870.fraport_achieves_first_quarter_profit_de.htm