FRANKFURT, Germany, May 9, 2017 /PRNewswire/ --
Traffic growth recorded at most Group airports - Net debt in 2017 expected to increase due to takeover of Brazilian airports
FRA/gk-rap - The majority of airports in the Fraport Group achieved passenger growth in the first three months of 2017. On the back of that growth, the Group's home-base Frankfurt Airport (FRA) generated higher revenue from airport charges. FRA's retail business also benefited from passenger growth, with a corresponding positive impact on net retail revenue per passenger. Outside Frankfurt, Fraport's Group airports in Lima (Peru), Ljubljana (Slovenia), St. Petersburg (Russia), Varna (Bulgaria), and Xi'an (China) reported robust passenger growth. Antalya Airport (Turkey) continued to register declining passenger traffic, due primarily due to the late Easter, which fell in April this year instead of March last year.
Reflecting this positive trend, Group revenue increased by 3.5 percent to EUR592.6 million in the first quarter of 2017. In contrast, the Group's operating result or EBITDA (earnings before interest, tax, depreciation and amortization) decreased by 5.7 percent to EUR137.3 million, due to higher personnel expenses and cost of materials, as well as one-off effects. These included, in particular, the creation of provisions for a personnel-restructuring program at FRA, and expenses for staff hired for the new Fraport Greece subsidiary.
Contrary to the operating result, the financial result improved from -EUR42.5 million to -EUR29.2 million. This was primarily due to improved results at Group companies that are accounted for using the equity method - including, in particular, the Antalya subsidiary - and the "other financial result", which was positively affected by fair value changes of derivatives. On the basis of the improved financial result, the Group's EBT (earnings before taxes) showed overall positive performance in the first quarter of 2017, rising by 18.8 percent to EUR25.9 million. Likewise, the Group result (net profit) improved to EUR18.8 million (up 24.5 percent), while earnings per share rose to EUR0.20 - an increase of 25.0 percent.
Operating cash flow increased by 32.3 percent to EUR119.6 million, helped by the positive business performance and lower payments for taxes on income. These factors also contributed to improved free cash flow, which advanced by 19.5 percent to EUR54.0 million. Net financial debt reduced to EUR2,295.6 million at the end of the first quarter, while the gearing ratio reached 63.3 percent (December 31, 2016: EUR2,355.9 million and 65.4 percent, respectively).
On March 16, 2017, Fraport AG won the concession for the two Brazilian airports of Fortaleza and Porto Alegre during a public auction. In view of the takeover of the concessions and the planned capital expenditure, Fraport's executive board currently expects the Group's net debt to rise by some additional EUR300 million during the 2017 business year, after a ratification procedure for the two concessions has been concluded.
Against the background of the development in the first quarter, Fraport AG's executive board is maintaining its further forecasts for the Group's asset, financial, and earnings position for the entire 2017 business year. Fraport's executive board chairman, Dr. Stefan Schulte, said: "In particular, a number of one-off effects at Frankfurt Airport had a negative impact on the operating result in the first quarter. Nevertheless, we could achieve a marked increase in the Group result. Compared to the mixed performance in 2016, we are currently seeing a clear return to traffic growth, generated both by traditional network carriers and low-cost providers."
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