MIAMI – Rising passenger numbers due to summer travel, significant cost reductions, and government help have permitted Fraport Group to achieve global positive results for the six months ending on June 30.
Notwithstanding the continuing negative effects of the COVID-19 pandemic, Fraport Group is reporting positive global results and net profits. The new situation has followed a weak first-quarter 2021 (Q1) but a second-quarter (Q2) marked by a substantial increase in traffic figures.
A Remarkable Rebound in Passenger Traffic
Fraport’s main airport, Frankfurt (FRA), and home base for the Group was the best performer for June 2021 with an almost 200% rise year-on-year at approximately 1.8mn passengers. The positive uptrend appears to continue in July 2021 with an approximate growth of 116% to 2.8mn travelers and a daily peak standing at 50% of the record year 2019 results.
The sudden and sharp increase in traffic is bringing about effects on airport operations and, as explained by Fraport CEO Stefan Schulte, particularly at FRA where traffic evolves with several daily peaks which, when added to the anti-Covid measures, requires more resources and time to process passengers and aircraft ground handling.
Fraport’s CEO also indicated that the Group is “working closely with partners, continuously enhancing operational processes while adapting our capacities to the fluctuations in demand.”
But despite the positive trend being observed in June and July, FRA is still affected by a strong traffic decline, minus 46.6% year-on-year, with approximately 6.5mn travelers going thru the facility during the first six months of 2021. In 2020 the negative effects of the Covid induced travel restrictions negatively impacted traffic from mid-March onward.
When a more evident comparison is made with the corresponding period of 2019, FRA registers a fall of 80.7% in traffic for the January to June period being reported. The opposite effect is felt on air cargo and mail operations which are showing an increase of 27.3% year-on-year, with a total of 1.2mn tons, and up by 9% when compared to 2019.
Other Fraport Group airports worldwide also fared well, with noticeable growth in June but remained well below the 2020 levels in terms of traffic.
Revenue Shows Slight Decrease
The Group’s revenue shows a downtrend of 10.9%, establishing itself at US$953.8m (€810.9m) for the January to June period but, when adjusted with revenue from capital expenditure at Fraport’s subsidiaries, revenue stands at US$850.2m (€722.8m) with a lesser drop of 8.9%. Revenue was positively affected by aid coming from the German government and from the State of Hesse.
The aid, amounting to US$188m (€159.8m), was granted to Fraport for maintaining operability at FRA during the pandemic’s lockdown in 2020 and has a positive effect on the Group EBITDA (Earnings Before Interests Taxes Depreciation and Amortizations). The funds are expected by the second half of 2021 with a positive effect on the liquidity and debt.
Besides financial aids coming from the German and Hesse states, Fraport has received compensation from the Greek government covering part of the financial losses incurred because of the crisis. The aid consisted in the waiver of the fixed and variable concession fees that are calculated on the passenger movements. The aid amounted to US$82mn (€69.7mn) and brought a positive impact on Fraport’s finances.
Further revenue came also from an agreement with the German Federal Police concerning the remuneration of security services formerly provided by Fraport, and a generated revenue of US$68m (€57.8mn) concurring to better EBITDA results
Comments from Fraport CEO
Stefan Schulte, Fraport CEO, commented on the report with these words: “The pandemic compensation from the German and State of Hesse governments strengthen our equity base. This enables us to continue our investments in climate protection and infrastructure development projects. At the same time, we have reduced our costs significantly.”
He continued his comments by stating: “Consequently, our operating result is now back in the black again. Also thanks to our broad and diverse international airport portfolio the Fraport Group is well-positioned to benefit from the expected recovery in air travel.”
Fraport expects between 20 and 25mn passengers traffic at FRA for the full year 2021 while the international portfolio is expected to show an even more dynamic recovery than FRA. A forecast on revenue stands to reach approximately US$2.35bn (€2bn) by the end of the exercise.
When taking into account the state aid received this year, the Fraport Group expects an EBITDA 2021 in the range of US$541m (€460m) and US$717.5m (€610m) with an upward revision when compared to the previous forecasts. Tha aid will also have a positive action on the Group’s EBIT, previously expected to be slightly in the red but now forecast to enter positive grounds. A similar situation will also affect the Group’s net profit.
Article source: Fraport mid-year report.
Featured image: Frankfurt Airport. Photo: Fraport Media