Thursday, December 2

ROUNDUP: Increasing air traffic makes Fraport more optimistic – share increases

FRANKFURT (dpa-AFX) – The recovery of passenger traffic from the Corona crisis makes the Frankfurt airport operator Fraport more confident. The number of passengers at Germany’s largest airport in the current year should now go towards 25 million, the company announced on Tuesday in Frankfurt. Fraport boss Stefan Schulte had previously thought fewer than 20 million passengers possible. Financially, things went much better for Fraport in the summer than analysts had expected. The board now expects the bottom line to be in the black for 2021.

The morning news was received positively on the stock exchange. The Fraport share rose by 2.3 percent in the morning, making it the front runner in the MDAX, the index of medium-sized stocks. Since the turn of the year, the paper has gained around 38 percent in value. The level of around 76 euros from the beginning of 2020 is still a bit away.

In view of the latest developments, Fraport boss Schulte now sees more rays of hope: “After massive losses in the past year and a sharp rise in debt, the situation is now improving.” Summer travel went comparatively well.

Similar to the heads of Lufthansa, Air France-KLM and the British Airways parent company IAG (International Consolidated Airlines), Schulte is now drawing hope from the opening of the USA to travelers from Europe. “We are assuming that intercontinental traffic will also gradually recover,” said the manager. “That’s why we’re a little more optimistic about winter than we were a few months ago.” Nevertheless, there will be a long way to go before Fraport can return to the pre-crisis level in terms of passenger numbers and significantly reduce its debt.

In terms of passenger traffic in Frankfurt, the executive board continues to expect a return to the level of the pre-Corona year 2019 at the earliest in 2025. At that time, the group had more than 70 million passengers at its home location.

According to management estimates, Fraport’s international airports are likely to return to their pre-crisis level by 2023 on average. Because while Frankfurt Airport is heavily dependent on long-haul traffic and business travelers, the airports operated by the Group in Greece and Turkey, for example, are primarily characterized by holiday travel. So far, this has recovered from the crisis much faster.

In the third quarter, the increase in travel brought the Fraport Group back into the black. Compared to the previous year’s period, which was marked by pandemics, sales rose by 70 percent to almost 691 million euros. Before interest, taxes, depreciation and amortization (Ebitda), a profit of almost 289 million euros was in the books. A year earlier, the slump in air traffic and provisions for extensive job cuts had resulted in an operating loss of 250 million euros.

This time Fraport benefited from compensation payments in the amount of 30 million euros for the corona-related losses at its investments in the USA, Slovenia and Greece. The bottom line was that the shareholders made a profit of almost 77 million euros after a loss of 304 million euros in summer 2020.

In view of these developments, the Management Board raised its forecasts for the current year. Sales should slightly exceed the previously mentioned mark of two billion euros. The group result should now be positive, and the operating profit before interest, taxes, depreciation and amortization (Ebitda) should reach around 650 to 700 million euros. Here, the Fraport leadership had previously only assumed 460 to 610 million.

Despite the improved profit prospects, shareholders should again forego a dividend for 2021. This applies above all to the state of Hesse and the city of Frankfurt am Main, which together own a good half of the Fraport shares./stw/lew/mis

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