Fraport Interim Report – First Half 2008: EBITDA Continues to Grow – Revenue and Group Profits Below Previous Year

2008-08-07 06:00:00

Fraport Interim Report – First Half 2008: EBITDA Continues to Grow – Revenue and Group Profits Below Previous Year

                 Outlook for Entire Year Remains Optimistic



    FRANKFURT AM MAIN, Germany, August 7 /EMWNews/ -- In the

first six months of fiscal year 2008 the Fraport Group registered sales

revenue of EUR1,044.5 million, 7.1 percent below last year's first half,

which benefited from special effects. Adjusted for these effects, however,

sales revenue jumped by a noticeable 5.8 percent. At the same time, EBITDA

(earnings before interest, taxes, depreciation and amortization) in the

first two quarters of 2008 rose by 4.5 percent to EUR285.4 million; the

adjusted EBITDA advanced by 2.4 percent. Group profit in the first half of

2008 reached EUR93 million, 9.5 percent short of the previous year's level

due to higher interest expenses. The undiluted profit per share slipped

from EUR1.12 to EUR1.01.



    From January through June 2008, Fraport recorded 26,262,754 passengers

at Frankfurt Airport, 2.2 percent more than in the first six months of

2007. At Fraport's majority-owned airports (Frankfurt, Frankfurt-Hahn,

Antalya, Lima, Burgas and Varna), the number of passengers climbed by 3.7

percent to 36,624,192 in the first half of 2008. Also in the reporting

period the Group's cargo (airfreight + airmail) throughput surged 6.1

percent year-on-year to 1,250,146 metric tons.



    The lower sales revenue was due to a loss of EUR79.6 million in revenue

because of Fraport's sale of its ICTS Europe security subsidiary on April

1, 2008, and to revenue of EUR57.6 million received last year in connection

with the Airrail Center finance lease. Adjusted for these two special

effects, Group profits rose by 5.8 percent. In particular, this increase

can be attributed to the first-time full consolidation since August 2007 of

Lima Airport (up EUR42.7 million). At Frankfurt Airport, higher revenue was

achieved especially from additional business in the Retail and Properties

segment.



    Operating expenses dropped by 8.7 percent to EUR813.1 million in the

reporting period. Adjusted for the aforementioned special effects,

operating expenses were up by eight percent year-on-year. This rise can

also be primarily attributed to the first-time full consolidation of

Fraport's Peruvian investment in Lima (up EUR30.6 million).



    Personnel expenses sank by 9.9 percent to EUR495.1 million due to the

sale of ICTS Europe in the first half of 2008. Adjusted, personnel expenses

grew under-proportionately by 3.6 percent compared to the same period last

year - despite the rise in personnel figures and the newly negotiated

collective pay settlement.



    Non-staff costs declined from EUR340.6 million in the first half of

2007 to EUR318 million in the first half of 2008 due to the previously

mentioned special effects. On an adjusted basis, non-staff costs increased

by 15.8 percent.



    The personnel expense ratio of 47.4 percent was one percentage point

below the adjusted 2007 figure, while the non-staff cost ratio of 30.4

percent was 2.6 percentage points above.



    EBITDA in half-year comparison grew by 4.5 percent to EUR285.4 million.

The EBITDA margin of 27.3 percent exceeded the previous year's figure by

three percentage points. Adjusted for the special effects, EBITDA rose by

2.4 percent or EUR6.5 million over the adjusted half-year period in 2007 to

EUR275.4 million. The financial result deteriorated noticeably from minus

EUR4.1 million in the comparable period last year to minus EUR48.7 million

in the reporting period. This deterioration was mainly due to a strong

increase in interest expenses: resulting primarily from interest cost

compounded on Fraport's long-term liabilities for the concession payable to

operate Antalya, the liabilities in connection with the framework agreement

signed with Celanese AG/Ticona GmbH, and from increased capital

investments.



    For the entire business year 2008, Fraport expects the pending payment

of EUR41.9 million under the German federal government's investment

guarantee for capital investments abroad (GKA) in connection with Fraport's

engagement in Manila to have a positive impact on Group profits. However,

when adjusted for this amount, Group profit will fall below the previous

year's level. In contrast to previous expectations, Fraport's Aviation

segment will achieve revenue growth due to increased security standards and

stronger demand for security services. In contrast, the unexpectedly high

collective pay settlement will have a negative impact on the results of the

personnel-intensive Ground-handling segment. Fraport expects results to

advance for the Retail and Properties segment. The External Activities

segment will develop according to plan. However, profits could be curbed

due to the weak U.S. dollar.



    Despite the aforementioned changes, Fraport remains steadfast in its

forecast to raise Group EBITDA above the 2007 figure. Likewise, revenue -

adjusted for the one-time Airrail Center finance leasing effect and the

de-consolidation of ICTS Europe - is expected to exceed the previous year's

level.



    Photos (print quality) of Frankfurt Airport and Fraport AG may be

downloaded free of charge via the Internet at http://www.fraport.com, menu

item "Press Center", then "Photo Archive".



    Furthermore, footage material for TV journalists is available for

downloading free of charge at http://fraport.cms-gomex.com




For More Information, Please Contact: Fraport AG Frankfurt Airport Services Worldwide Robert A. Payne, B.A.A. - Manager International Press Press Office (Dept. UKM-PS), Corporate Communications (UKM) 60547 Frankfurt am Main, Federal Republic of Germany Tel.: +49-69-690-78547; Fax: +49-69-690-60548; E-mail: r.payne@fraport.de; Internet: http://www.fraport.com

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