The Fraport Group has reported revenue of €2.4bn/$2.5bn (+0.8%) for its fiscal year ending December 2014 [+3.2% on an adjusted basis-Ed] although its Retail & Real Estate business fell by 1.8% to €455.7m ($475.7m) compared with 2013.

 

Group operating results (EBITDA) nevertheless grew by 7.8% to €790.1m ($844m), while earnings before interest and tax increased by 10.1% to €482.8m ($515.3m).

 

The company said that its ‘good financial performance’ was attributed to the positive operational development at the company’s Frankfurt Airport (FRA) home-base, in connection with the comparably mild winter, as well as to traffic growth at all of the Group’s airports.

 

It said that despite numerous strike-related flight cancellations, Frankfurt Airport’s passenger traffic increased by 2.6%, hitting a new record high of almost 60m passengers in 2014.

 

Fraport AG Executive Board Chairman Dr. Stefan Schulte said: “The basis for positive development in fiscal year 2014 was our motivated and committed staff, who I would like to thank on behalf of the entire executive board.”

 

 

ESTABLISHED US RETAIL BASE

He also highlighted the successful expansion of Fraport’s international investment portfolio as a key development for the company in 2014: “With the purchase of AMU Holding (Airmall), we established the foundation for Fraport’s airport retailing business in the American market.

 

“Furthermore, Fraport won the international bid for Ljubljana Airport (LJU) in the capital city of Slovenia in south-eastern Europe.”

 

Looking at its four divisions, Fraport noted that revenue in its Aviation business segment rose by 4.6% to €884.2m ($944.1m) in the 2014 fiscal year. Amongst other factors, Fraport management said: “Positive contributing factors here included Frankfurt Airport’s passenger growth, as well as greater revenue for airport charges.”

 

In the Retail & Real Estate division it generated a disappointing €455.7m ($486.5m) representing a 1.8% revenue decline compared to 2013. Management said this was mainly as a result of lower retail revenue, as well as lower revenue from land sales and energy supply services.

 

 

NET RETAIL PER PAX DOWN 4.7% TO $3.66

In the results statement, management said: “The key performance indicator ‘net retail revenue per passenger’ fell by 4.7% to €3.43 ($3.66), largely reflecting changing passenger structures and reduced purchasing power related to the strong euro exchange rate – especially compared to the rouble and yen currencies.

 

“Despite the decline in revenue development, segment EBITDA improved by 1.9% to €356.5m ($380.6m) year-on-year. This can be attributed to a drop in expenses, resulting primarily from lower sales of real estate inventories, as well as reduced requirements for energy supply services.”

 

In its other divisions, Fraport reported that its Ground Handling business grew by 1.1% to €656.2m ($700.6m) thanks to increased passenger numbers, the deployment of larger aircraft at Frankfurt and greater revenue from infrastructure charges.

 

By comparison the External Activities & Services division improved its performance by 10.4% to €387.7m ($414m). Management added: “The main reasons for this included the positive development of the Group’s Twin Star subsidiary, as well as passenger growth at Lima Airport. The new Group companies, AMU Holdings Inc. and Ljubljana, contributed €27.8m ($29.6m) to revenue growth.”

 

 

 

PROSPECTS FOR 2015

For the fiscal 2015 period ahead, Fraport says it is expecting a more positive outlook for financial trends, albeit within a challenging environment. It says that passenger traffic at Frankfurt Airport is predicted to grow by two to three per cent this year – and by even a higher rate at its other airports.

 

With this in mind, the Executive Board is expecting total revenue to reach between around €2.55bn and €2.6bn ($2.72bn and $2.77bn). It is also looking for profits to grow to between €265m and €285m ($282.9m and $305.2m) providing the marketplace general improves and strike actions reduce.

 

In terms of traffic, 2014 was a year when Fraport was hit by airline strikes (and bad weather) and this strike trend has continued into 2015 with Lufthansa and its pilots’ union.

 

For full details of Fraport’s traffic levels across its international airports network, click here: http://www.trbusiness.com/regional-news/europe/frankfurt-2014-traffic-growth-hit-by-strikes/