FRAPORT: First Half 2018 positive business performance despite challenges

The Fraport Group closed the first six months of the 2018 business

year (ending June 30) with a significant 13.0 percent rise in Group

revenue to EUR1.532 billion. At the Group’s Frankfurt Airport (FRA)

home base, the increase was driven, in particular, by traffic growth

– resulting in higher proceeds from airport charges and security

services, a rise in charges from ground services and infrastructure,

as well as higher parking revenue. Fraport’s international business

also contributed to revenue growth, with major contributions coming

from Fraport Greece (plus EUR83.5 million) and Fraport Brasil (plus

EUR76.4 million). In the first half of 2017, the two Brazilian

airports of Fortaleza (FOR) and Porto Alegre (POA) were not yet

operated by Fraport Brasil and thus not incorporated into the Group.

The operational result or EBITDA (earnings before interest, taxes,

depreciation, and amortization) also increased significantly by 9.8

percent year-on-year to EUR461.3 million, but was dampened, among

other things, by traffic-related higher personnel expenses for ground

handling and security services at FRA. Higher interest expenses for

Fraport Greece and the two Fortaleza and Porto Alegre subsidiaries

had a negative influence on the Group’s financial result – slipping

from minus EUR50.4 million in the first half of 2017 to minus EUR77.4

million in the reporting period. This led to a Group result (net

profit) of EUR140.8 million, up 2.8 percent.

Due to higher investments at FRA and Fraport’s international Group

airports, free cash flow decreased by EUR221.3 million to minus

EUR23.2 million in the first six months of 2018.

Frankfurt Airport served 32.7 million passengers in the first half of

2018 – an increase of 9.1 percent. With about 1.1 million metric

tons, cargo throughput (airfreight + airmail) remained almost stable

year-on-year. Across the Group, all airports in Fraport’s

international portfolio posted strong passenger growth.

Summarizing the first half of the 2018 business year, Fraport AG’s

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. It was

only thanks to the excellent cooperation with our partners,

government agencies and our airline customers and the outstanding

commitment of all airport employees that we were able to accommodate

the considerable growth experienced in the first half of this year.

Overall, we have delivered a positive business performance despite

numerous challenges.”

In view of FRA’s strong traffic growth in the first six months of the

year, Fraport AG’s executive board now expects passenger numbers to

reach slightly over 69 million for the full 2018 business year.

Excluding the effects from Fraport’s expected divestiture of Hanover

Airport (HAJ), the executive board is maintaining its outlook for the

Group’s 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 approximately EUR1,080 million and

EUR1,110 million; Group EBIT: between about EUR690 million and EUR720

million; Group EBT: between some EUR560 million and EUR590 million;

Group Result: between approximately EUR400 million and EUR430

million).

Following the expected sale of Fraport’s stake in Hanover Airport,

the executive board expects the divestiture to contribute some EUR25

million to Group EBITDA and about EUR85 million to Group EBT. After

deduction of related income tax liabilities, the Hanover transaction

will also have a positive impact of about 77 million euros on the

Group result (net profit). Taking into account these special effects,

Fraport’s executive board expects the Group’s EBITDA, EBIT, EBT and

Group Result to exceed the above-mentioned margins for the full 2018

business year.

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