Fraport Reports “Solid Performance in Challenging Environment”

Fraport's home base - Frankfurt. (Photo: Fraport)

Fraport's home base - Frankfurt.  (Photo: Fraport)
Fraport’s home base – Frankfurt. (Photo: Fraport)

Airport operator Fraport has released its Group’s Interim Report for the first half of 2016.
It states that in the first half of 2016, the Fraport Group achieved revenue of just over €1.2 billion. It added that although that figure represents a €17.1 million (or 1.4%) decline year-on-year, it must be taken into account that a change in the Group’s scope of consolidated companies occurred in the previous business year. During 2015, Fraport sold 51% of its capital shares in the FCS Frankfurt Cargo Services subsidiary and also made a full disposal of Air-Transport IT Services, both formerly wholly-owned subsidiaries. Adjusting for these changes, Group revenue in the first half of 2016 advanced by €19.2 million, up 1.6%. Revenue was positively impacted by higher revenue from the sales of land, among other factors. Outside of Frankfurt, the Group’s subsidiaries, Lima Airport Partners, Twin Star and AMU Holdings Inc, also contributed to revenue growth. Among other things, declining passenger volumes at Frankfurt Airport contributed to negative effects on revenue.
The Group’s EBITDA (earnings before interest, tax, depreciation and amortization) declined by 1.7% to €378.4 million in the first six months of 2016. This, says Fraport, was also due to the slowdown in passenger traffic at Frankfurt Airport and the corresponding drop in retail revenues. With depreciation and amortization remaining almost constant, Group EBIT reached €214.6 million (down 3.3%).
The slightly improving financial result as well as lower income tax expenses led to a Group result of €99.7 million (down 3.2%). Higher cash flow used in investing activities and one-off tax effects in the first quarter of 2016 caused free cash flow to contract by €40.4 million to €149.3 million.
Fraport AG’s Executive Board Chairman, Dr Stefan Schulte, emphasized that the Group achieved solid first-half results despite the challenging environment. Dr Schulte said: “With air traffic being negatively impacted by geopolitical circumstances, several of our Group airports experienced significant traffic declines.” As a result, Fraport’s Executive Board has revised its passenger forecast for Frankfurt Airport and is now expecting a slight drop in passenger traffic. Dr Schulte, however, reconfirmed the Group’s financial target for the full year, adding: “Also taking into account the expected positive effects resulting from the sale of a partial stake in St Petersburg, we are maintaining our outlook for the Group’s asset, financial, and earnings position for the 2016 business year, despite the challenging environment.”
Fraport’s home-base Frankfurt Airport (IATA: FRA) handled 28.7 million passengers in the first six months of 2016, representing a 0.9% decline year-on-year. In particular, the second quarter saw flight bookings drop amid travellers’ concerns after terrorist attacks in various countries. Cargo throughput (airfreight + airmail) rose by 0.4% in the reporting period, to over 1.0 million metric tons. Aircraft movements decreased by 1.0% to some 227,000 take-offs and landings, reflecting airlines’ ongoing consolidation measures and the general trend towards deployment of larger aircraft. Accumulated maximum take-off weights (MTOWs), by contrast, climbed by 1.2% – reaching a new record high.