FRAPORT: Revenue and earnings increase – Outlook confirmed
The Fraport Group has successfully started off the new business year, achieving higher revenue and earnings in the first three months of 2019.
Supported by solid passenger growth at Frankfurt Airport and almost all of Fraport’s airports worldwide, Group revenue rose by 17.9 percent to EUR803.8 million. Adjusted for revenue in connection with capital expenditure for expansion projects at Fraport’s Group companies worldwide (according to IFRIC 12), revenue grew by 5.3percent to EUR678.5 million. At Frankfurt Airport (FRA), traffic growth led to higher revenue, particularly from ground handling services, as well as security services and infrastructure charges.
Moreover, the retail and parking businesses had a positive impact on revenue. In Fraport’s international portfolio, major contributions came, in particular, from the Lima (Peru) and the Fraport USA Group companies. In the U.S. market, Fraport recently took over management of retail areas at New York-JFK’s Terminal 5 (April 2018) and at Nashville International Airport (February 2019).
The operating result or Group EBITDA (earnings before interest, taxes, depreciation and amortization) advanced by 14.8 percent to EUR200.6 million in the reporting period. This amount includes a EUR10.9 million positive effect, resulting from the application of IFRS 16 (effective January 1, 2019). The positive effect is offset by additional amortization and depreciation in the amount of EUR10.4 million and a EUR2.8 million increase in interest. Establishing new rules for the accounting of leases, the IFRS 16 standard specifically affects lease contracts between the Fraport USA Group company and respective concession lessors. Thus, Group EBIT climbed by 4.6 percent to EUR86.1 million. Supported by a better interest result, the financial result improved from minus EUR56.1 million in Q1 2018 to minus EUR49.6 million in the first quarter of 2019.
Correspondingly, Group EBT soared by 39.3 percent to EUR36.5 million, while the Group result (net profit) jumped 42.9 percent to EUR28.0 million.
Commenting on the Group’s positive business performance in the first quarter of 2019, Fraport AG’s executive board chairman, Dr. Stefan Schulte, said: “We had a robust start to the new business year, supported once more by the ever growing contributions to revenue and earnings from our Group airports worldwide. In Frankfurt, we successfully managed the first stress test of 2019 during the busy
Easter travel period. Together with our partners, we will continue striving to accommodate the high demand of our customers in the best possible way. To achieve this goal, we will further optimize andstreamline processes and improve infrastructure utilization, as well as vigorously moving our expansion projects forward.”
Operating cash flow jumped noticeably by 60.2 percent to EUR129.0 million in the first three months of 2019, reflecting the positive operational performance across the Group’s airports. When adjusting for the changes in net current assets included in the statement of cash flows, operating cash flow improved by EUR12.6 million or 9.1 percent. Despite increased operating cash flow, free cash flow dropped strongly to minus EUR245.9 million in the first quarter of 2019, due to higher capital expenditure both at Frankfurt Airport and in the international business (Q1 2018: minus EUR66.9 million).
FRA welcomed almost 14.8 million passengers from January to March 2019, up 2.5 percent year-on-year. FRA achieved this increase despite the fact that traffic in March 2018 received an additionally boost from the earlier timing of the Easter school holidays. This year, in comparison, the Easter break fell during April. Fraport’s Groupairports worldwide largely reported positive traffic performance, although the different timing of the Easter holidays impacted some Group airports serving tourist destinations.
Following the end of the first quarter of this year, the Executive Board maintains its forecasts for fiscal year 2019.
You can find our Interim Release Q1 2019 (http://ots.de/HFMbNo) on the Fraport AG website.