Copenhagen Airports A/S (CPH) will upgrade its full-year forecast or ‘guidance’ after experiencing a ‘good’ Q3 performance driven by a 7.1% increase in passenger numbers in the nine months to 30 September 2014.

 

The increase in passenger traffic – buoyed by a particularly strong performance during the summer months – resulted in revenue and pre-tax profit improvements.

 

It generated growth for the non-aeronautical part of the business, including the shopping centre, parking and the hotel operation. Overall, revenue from the shopping centre increased by 4.2% driven by an 11% growth in Food & Beverage.

 

Revenue from the specialty shops was up by 6.5%, and revenue from the duty- and tax-free stores was up by 2.3%, indicating that the airport sees a positive full-year effect from the refurbishment of the six duty free stores in 2013.

 

In the nine months to 30 September 2014, 19.7m passengers travelled through Copenhagen Airport, which represents a 7.1% year-on-year increase. The growth in passenger numbers lifted revenue by 6.9%, while profit before tax was up by 10.9% to DKK 1,035.4m ($173.4m). In Q3 alone, Copenhagen Airport had more than 7.5m passengers, which is a record for the quarter.

 

“Passenger numbers were record high this summer, and we’ve had stable traffic growth throughout the summer programme. Against that background, we are now upgrading our full-year guidance,” said Thomas Woldbye, CEO of Copenhagen Airports A/S.

 

Both images below: Shopping street at Copenhagen Airport.

 

The number of international passengers was up by 7.4%, while transfer passengers was up by 14.4%, which ‘strengthens Copenhagen Airport’s position as the preferred hub of northern Europe’. In addition, the number of long-haul passengers rose by 8.4% – partly due to a significant increase in the number of travellers to the United States.

 

A strong increase of 40.2% was seen in the traffic of the United States, boosted by Norwegian’s three new routes to Fort Lauderdale, New York JFK and Los Angeles, the full-year effect of SAS’s route to San Francisco and, not least, the upgrade of the route to New York.

 

“Our strategic partnerships with SAS and Norwegian have led to even closer collaboration in areas such as efficiency improvements of the airlines’ operating conditions at the airport. That has helped lower the airlines’ operating costs, paving the way for growth,” said Thomas Woldbye.

 

In recent years, CPH’s capital investment has been in the order of DKK1bn ($167,844,511) per year, and as a result of the steady increase in passenger numbers, CPH is now progressing with plans to expand the central security screening facility. In addition, CPH recently initiated an expansion of Pier C, which is used for long-haul traffic and for non-Schengen traffic. The pier will be extended by 100 metres, adding three new stands with direct access from the gates.

 

Based on the traffic growth throughout the summer programme, CPH is upgrading its guidance for 2014. CPH still expects an increase in the number of passengers, which is expected to have a positive impact on revenue. Operating costs are expected to be higher than in 2013, primarily due to the expected rise in passenger numbers and cost inflation, but this will partly be offset by a continuing focus on operating cost efficiencies.

 

Overall, the forecast of profit before tax for 2014 is raise to the DKK 1,200m ($201.4m) to DKK 1,300m ($218.3m) range, when excluding one-off items. This should be compared to the previous guidance of profit before tax of DKK 1,100.0m ($184.7m) and DKK 1,200m. Operating profit before depreciation is projected to be higher in 2014 than in 2013, when excluding one-off items.

 

Under the charges agreement, CPH must invest an average of DKK 500 million annually but as in previous years, CPH expects to invest at a level significantly higher in 2014 than what we are committed to under the charges agreement. CPH will also be investing in non-aeronautical projects for the benefit of airlines and passengers.