Fraport upgrades forecast for 2022 after first-half rebound

GERMANY. Fraport Group, owner of Frankfurt Airport, has revised its traffic and financial forecasts for 2022 upwards after a strong recovery in the first six months.

Germany’s largest hub is now expected to welcome about 45 million to 50 million passengers in 2022 compared to between 39 million and 46 million passengers under the previous forecast.

A snapshot of Fraport financial performance in the half; click to enlarge

Fraport is also adjusting the outlook for EBITDA, which is now expected to reach a higher range of between about €850 million and €970 million. This follows the conclusion of the sale of its stake in Xi’an Airport. Group EBIT is now projected to reach between €400 million and €520 million compared to a previous forecast of €320 million to €440 million.
Fraport posted revenue of €1,348.5 million in the first six months of 2022, a leap of +66.3% year-on-year. The performance was buoyed considerably by the rebound in passenger traffic across the group.

Following the widespread lifting of pandemic-related travel restrictions, some of Fraport’s Greek airports serving holiday destinations – including Rhodes, Santorini and Kerkyra on the island of Corfu – exceeded 2019 pre-crisis passenger levels during the first half.

How Retail & Real Estate performed in the six months; click to enlarge

Overall, in the first six months, nearly 21 million passengers travelled via Frankfurt Airport. While this was still -38% below the same period in 2019, the figure represents a growth rate of +220% compared to the same period in 2021. For the first time since the start of the pandemic, Frankfurt welcomed almost 5 million passengers in June 2022, or around 75% of the June 2019 figure.

Retail & Real Estate revenue reached €192 million, well ahead of the H1 2021 figure of €139 million but short of the 2019 number, €241 million. Within this, retail revenue alone more than doubled year-on-year to €58 million.

EBITDA (earnings before interests, taxes, depreciation and amortisation) increased by +21.8% year-on-year to €408.3 million. EBITDA grew at a slower pace than revenue, because last year’s second-quarter EBITDA was affected by several positive one-off events.

The group reported a loss of €53.1 million in the half, compared to €15.4 million a year earlier.

The result was primarily due to the full write-down of the €163.3 million loan receivable from Thalita Trading Ltd., the company that holds Fraport’s minority stake in the company that runs St. Petersburg Pulkovo Airport. Schulte explained: “In view of the further development of sanctions related to Russia’s war against Ukraine, we have fully written off this loan receivable. At the same time, we are fully maintaining our claims related to the loan. The write-off does not imply a divestiture, since, under the current concession agreement, a sale of our stake in Pulkovo continues to be excluded until 2025.”

How some key Fraport airports have fared in traffic terms in the half; click to enlarge

As a result, Fraport is revising downward its previous outlook for full-year net profit to a range of between about €0 and €100 million.

Fraport CEO Dr. Stefan Schulte said: “Since March, we have been experiencing a strong upward trend in passenger traffic across our Group because people are able and eager to travel once again. At Frankfurt Airport, we are now expecting between 45 million and 50 million passengers for the full year 2022. This is higher traffic volume than expected at the beginning of the year.

“Our key operating financial figures have also improved – even when adjusting for last year’s positive one-off effects such as the reimbursement we received for maintaining Frankfurt Airport’s operations during the lockdown, as well as the pandemic compensation obtained in Greece. The main factors supporting this favourable development included the strong performance from the airports in our international portfolio and the positive contribution resulting from the divestiture of our Xi’an investment. Nevertheless, we are still far from reaching the levels seen in 2019.”

Schulte added: “The strong and dynamic recovery in passenger traffic poses some major operational challenges for us. Unfortunately, this also results in recurrent delays. Nevertheless, with the start of the summer school vacations in Germany, we have been able to maintain stable and reliable operations. This underscores the effectiveness of the measures that we have implemented in Frankfurt, in cooperation with our partners. However, there is still a way to go until we will fully meet our own quality requirements again.”

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