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 €803.8 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 5.3 percent to €678.5 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 €200.6 million in the reporting period. This amount includes a €10.9 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 €10.4 million and a €2.8 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 €86.1 million. Supported by a better interest result, the financial result improved from minus €56.1 million in Q1 2018 to minus €49.6 million in the first quarter of 2019. Correspondingly, Group EBIT soared by 39.3 percent to €36.5 million, while the Group result (net profit) jumped 42.9 percent to €28.0 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 and streamline processes and improve infrastructure utilization, as well as vigorously moving our expansion projects forward.”
Operating cash flow jumped noticeably by 60.2 percent to €129.0 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 €12.6 million or 9.1 percent. Despite increased operating cash flow, free cash flow dropped strongly to minus €245.9 million in the first quarter of 2019, due to higher capital expenditure both at Frankfurt Airport and in the international business (Q1 2018: minus €66.9 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 additional boost from the earlier timing of the Easter school holidays. This year, in comparison, the Easter break fell during April. Fraport’s Group airports 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 the fiscal year 2019.
In tandem with the company’s first quarter 2019 interim financial report, Fraport AG today also issued its latest Sustainability Report and a GRI report for the full 2018 business year. Both reports provide an insight into Fraport’s activities and progress regarding responsible corporate governance. The reports can be downloaded in PDF format at www.fraport.com/responsibility.