GERMANY. Fraport Group retail revenue slipped by almost -4% year-on-year in the first half of 2018, with the figure hitting €94.8 million, the company reported today. Net retail revenue per passenger fell by a sharp -12.3% to €3.06 in the period.
Fraport Group noted: “Influences on retail revenue included in particular the above-average growth in passenger numbers on European routes, where passengers tend to spend less, as well as capacity bottlenecks at the terminals, particularly at security checkpoints, which reduced the time available for purchases. In addition, the devaluation of various currencies compared to the euro led to a loss of purchasing power.”
The wider Retail & Real Estate division posted a -10% drop in revenue to €241.3 million. The negative revenue performance for the business segment was mainly due to lower proceeds from the sale of land compared to H1 2017. The company said it expected to post a fall in revenue from this division in the full year too.
Frankfurt Airport served 32.7 million passengers in the first half, an increase of +9.1%. Other airports in Fraport’s international portfolio also posted strong passenger growth (see table).
Group revenue overall climbed by +13% to €1.532 billion. At the home base of Frankfurt, this was driven by traffic growth, which led to higher income from airport charges and security services, as well as higher parking revenue. Fraport’s international business also contributed to revenue growth, with major contributions coming from Fraport Greece (which added income of €83.5 million) and Fraport Brasil (+€76.4 million). In the first half of 2017, the two Brazilian airports of Fortaleza and Porto Alegre had not yet been taken over by Fraport Brasil.
EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by +9.8% year-on-year to €461.3 million, but was dampened, among other things, by traffic-related higher personnel expenses for ground handling and security services at Frankfurt. Higher interest expenses for Fraport Greece and the Fortaleza and Porto Alegre subsidiaries had a negative influence on the group’s financial result – slipping from minus €50.4 million in the first half of 2017 to minus €77.4 million in the reporting period. This led to a net profit of €140.8 million, up +2.8%.
Fraport Executive Board Chairman Dr. Stefan Schulte said: “The ongoing growth underscores Frankfurt Airport’s attractiveness as a global aviation hub, but also poses great challenges to all of us. Overall, we have delivered a positive business performance despite numerous challenges.”
Given the strong traffic growth in the first six months, Fraport expects passenger numbers to reach slightly over 69 million for the 2018 business year. Excluding the effects from Fraport’s expected sale of its stake in Hannover Airport, the executive board maintains its outlook for the key financial figures and expects them to reach the upper levels of the margins forecast in the Annual Report at the beginning of the year (Group EBITDA between €1,080 million and €1,110 million; Group EBIT between about €690 million and €720 million; net profit between €400 million and €430 million).
