Fraport AG's executive board chairman, Dr. Stefan Schulte, struck positive note at the company's Annual General Meeting (AGM) today:
"We can look back on a very successful 2018. Supported by strong growth in passenger traffic at Frankfurt Airport and our international locations, we achieved a new record high for revenue and earnings. At the same time, we are laying the foundation for further long-term growth with our extensive investments - particularly in Frankfurt, Greece, Brazil and Peru."
Group revenue increased by 18.5 percent to almost EUR3.5 billion.
After adjusting for proceeds related to expansion investments for the international Group companies (based on IFRIC 12), revenue rose by 7.8 percent to more than EUR3.1 billion. Group EBITDA increased by 12.5 percent to over EUR1.1 billion. Consolidated earnings climbed by 40.6 percent to about EUR506 million. This includes the EUR75.9 million earnings component resulting from the sale of Fraport's stake in Flughafen Hannover-Langenhagen GmbH.
Because of Fraport's strong operating and financial performance, the Supervisory Board and the Executive Board proposed a dividend of
EUR2.00 per share for fiscal year 2018 to the Annual General Meeting.
This represents an increase of 50 cents per share - up by one-third compared to the previous year.
International Business Makes Key Contribution to Earnings
With a 36 percent share, the "International Activities & Services" business segment, for the first time, accounted for the largest share of EBITDA among the four business segments (adjusted for selling Fraport's stake in Flughafen Hannover-Langenhagen GmbH). Passenger traffic at most of the Group airports reached record levels.
Schulte: "Our strategy of expanding Fraport's international business is bearing fruit. We will continue on this path. We are maximizing growth and earnings potential around the world, while giving ourGroup an even broader and stronger foundation for the future."
Alone at Fraport's 14 Greek regional airports, five new passenger terminals are currently being built. At both airports in Brazil, expansion projects are scheduled to be completed by the end of this year. In Peru, construction of the second runway is set to begin during the second half of 2019, with work on the new terminal starting the next year.
FRA: Important Milestone Reached with Terminal 3 Project Fraport's expansion program at its Frankfurt Airport home base is also progressing according to plan. Laying the cornerstone for the new Terminal 3 recently marked a key milestone for Fraport. This expansion is urgently needed: With some 69.5 million passengers recorded last year, Frankfurt Airport welcomed more passengers than ever before. The Pier G project at Terminal 3, which has been moved forward, will be the first noticeable step to improving capacity constraints in the terminals. Scheduled to be completed in 2021, Pier G will provide capacity for some four to five million passengers per year. From mid-July, the new extension to Area A of Terminal 1 will considerably improve congestion at the security controls, which are heavily utilized especially on peak traffic days. Fraport's
extension building creates space for seven additional security lanes which feature enhanced layout for faster and more efficient screening
procedures. Furthermore, the company is continuing to add staff.
Some 2,300 new hires are planned for this year, on top of about 3,000 new staff already recruited in 2018.
After a challenging 2018, which impacted the entire aviation industry, Frankfurt Airport successful met the first endurance test of 2019 during the Easter holiday rush. Schulte said: "Some of the measures that the various partners in aviation have implemented are already helping to improve punctuality and reliability. However, efficient reorganization of Europe's heavily utilized airspace is still required."
Outlook for 2019 Confirmed
Fraport is continuing to forecast sustained growth throughout its entire portfolio for the 2019 fiscal year. Passenger traffic at Frankfurt Airport is forecast to rise between about two percent and three percent - noticeably more moderate than in the previous two years. Fraport expects a light increase in consolidated revenue to about EUR3.2 billion (adjusted for IFRIC 12). Group EBITDA is forecast to be in the approximate range of EUR1,160 million to EUR1,195 million, despite the revenue loss resulting from the sale of Fraport's stake in Flughafen Hannover-Langenhagen GmbH. The application of the IFRS 16 accounting standard - which changes the accounting rules for leases - will not only make a positive
contribution to Group EBITDA, but will also lead to much higher depreciation and amortization in the 2019 fiscal year. As a result, Fraport expects Group EBIT to be in the range of about EUR685 million to around EUR725 million. The company also expects to post consolidated earnings between about EUR420 million to around EUR460 million. The dividend per share should remain stable at the higher level of EUR2 for the 2019 fiscal year.