November 6, 2008
Fraport Interim Report – January to September 2008: Growth Despite Downward Trend
FRANKFURT, November 6 /PRNewswire-FirstCall/ -- In the first three quarters of fiscal year 2008 all key traffic and financial indicators of the Fraport Group continued to improve. Frankfurt Airport (FRA) welcomed 0.1 percent more passengers, while Group-wide Fraport recorded 1.9 percent passenger growth. Airfreight tonnage rose by 1.2 percent at FRA and climbed by 2.9 percent for the Fraport Group's airports combined. With EUR 1.6 billion, sales revenue fell 8.8 percent short of the previous year's level. However, adjusted for the extraordinary effects in the first nine months of 2007, Group revenue jumped by 4.4 percent. Unadjusted, EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 0.4 percent to EUR492.5 million; the adjusted EBITDA grew by 1.8 percent. Group profit advanced by 0.6 percent year-on-year to EUR 220 million.
Fraport AG's executive board chairman Dr. Wilhelm Bender said that after the satisfying rates of increase in the first half of 2008, "the economic development with its downward business trend" as well as the global financial crisis have affected world air traffic and thus Fraport's operating business.
In particular, accumulated maximum takeoff weights (MTOWs) developed positively at Frankfurt Airport, increasing by 1.3 percent over the comparable January-to-September 2007 period to 21.5 million metric tons. Because MTOWs are an indicator of aircraft size, "this means that the share of the lucrative intercontinental traffic at FRA has increased further" explained Bender. About 70 percent of all intercontinental flights to Germany land at Frankfurt. Bender called this a positive development, because "most long-haul passengers have strong purchasing power and a large propensity to spend." Furthermore, long-haul flights are mainly operated with widebody jets, which "earn us attractive fees and make particularly efficient use of our constrained capacities."
Bender stated that expansion of Frankfurt Airport's runway capacity was progressing on schedule. With the zoning approval for a new landing runway issued in January 2008, Bender expects the Hesse Administrative High Court in Kassel to render a positive decision in the fast-track proceedings by the beginning of 2009. "Then, we will start constructing the landing runway and open it for the 2011 winter timetable," said Bender.
This capacity expansion is essential for Fraport, despite the temporary stagnation or slide in traffic figures, emphasized Fraport's Bender. The excess demand seen at FRA for many years continues unabated. Furthermore, experience has demonstrated that after every crisis or phase of stagnation, world air traffic rebounds with over-proportionate growth rates: "After every global crisis, traffic here at Frankfurt Airport not only recovered but regularly recovered at overcompensating rates," explained Fraport's executive board chairman. For example, passenger figures at FRA slumped by nearly five percent during the 1991/1992 Gulf war, but after the war traffic rebounded to annual grow rates of more than eight percent. And after the 9/11 terrorist attacks in 2001, the Iraq war and the SARS epidemic, Fraport already registered 5.7 percent more passengers at FRA in 2004.
Until the opening of the new landing runway, Fraport plans to continue modernization as well as service and capacity optimization of the existing infrastructure at Frankfurt Airport. Thus, the international Pier B in Terminal 1 will be completely redesigned. Furthermore, construction will start on Pier A West, a brand new flight pier and a central building with a total of 160,000 square meters of space, which will create additional capacity for six million passengers per year.
In addition, development of Frankfurt Airport City is progressing. The nine-story Airrail Center on the rooftop of FRA's Long-distance Train Station is currently under construction; the new Gateway Gardens city district is being developed at the northern side of the airport; and a modern commercial and office park for logistics, trade and other aviation-related enterprises is mushrooming at the 110-hectare Monchhof site west of FRA.
Bender underscored that the company's External Activities segment will continue to play a vital role in developing and expanding the Fraport Group's business portfolio. In the current business year, approximately 170 million passengers will use the thirteen airports where Fraport is involved either via equity investments or management contracts. After the official launch of the German-Chinese joint-venture at Xi'an Airport, in which Fraport holds a 24.5 percent share, Fraport's executive board chairman has continued negotiating other projects in China. Thus, the company has already signed memorandums of understanding in Qingdao and Kunming. "We will of course remain active in other countries and regions of the world, too," emphasized Bender. However, Fraport will continue its policy of not acting as a mere financial investor and will get involved only where the company can profitably market its know-how and expertise gained over many decades of successfully operating Frankfurt Airport as one of the world's biggest air transportation hubs.
With an eye on the current development of the global economy, Bender said that Fraport anticipates passenger traffic at FRA to decline by between 1.0 and 1.5 percent in 2008. However, FRA's particularly attractive intercontinental passenger sector will continue to develop positively with 1.0 percent growth. Group-wide Fraport expects passenger growth of 1.0 percent, as well.
Overall, Fraport is well positioned for the future because of its productivity, high standard of services, and professionalism - recognized and in demand around the world.
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: [email protected]; Internet: http://www.fraport.com/
CONTACT: For more information, Please Contact: Fraport AG FrankfurtAirport Services Worldwide, Robert A. Payne, B.A.A. - Manager InternationalPress, Press Office (Dept. UKM-PS), Corporate Communications (UKM), 60547Frankfurt am Main, Federal Republic of Germany, Tel.: +49-69-690-78547; Fax:+49-69-690-60548; E-mail: [email protected] .