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Fraport Interim Report third quarter 2005

The Fraport Group’s operating business has developed very well during the first nine months of fiscal year 2005…

The Fraport Group’s operating business has developed very well during the first nine months of fiscal year 2005. In the third quarter of 2005, the Group again reported noticeable growth in revenues and earnings. Dr. Stefan Schulte, Fraport AG’s executive board member responsible for finance, therefore expects year end results to exceed slightly the current forecast for the 2005 business year.

“Fraport is progressing well in all business areas,” explained Schulte. Furthermore, he said that EBITDA (earnings before interest, tax, depreciation and amortization) will probably increase by about five percent. Up to now, it had been assumed that the EBITDA increase would be in the 3 to 4.5 percent range.

Regarding net income for the year, Schulte is now expecting even an increase of about ten percent compared to 2004. Thus, this reaches the upper end of the current forecast of five to ten percent growth.

During the first three quarters of 2005, revenue for Germany’s biggest airport operator climbed by 5.1 percent to €1,562.6 million. Above all, airport charges and increased revenue from security services contributed to this growth. In the third quarter of 2005, the important trade and gastronomy sector also contributed noticeably to Fraport AG’s growth in revenue.

Due to stringent cost management, Fraport’s non-staff costs and personnel expenses increased by only 3.8 percent during the reporting period – thus remaining clearly below the 5.1 percent growth in revenue.

During the first three quarters of 2005 Fraport’s Group-wide employment increased by 6.4 percent to 25,459 people, compared to the same period last year. ICTS Europe, Fraport’s dynamically growing security subsidiary, saw its employment climb by 13.1 percent to 10,583 people – accounting for the greatest share of the Group’s staff growth. At its Frankfurt home base, Fraport employed an average of 15,330 people duringthe January-to-September 2005 period.

Earnings before interest, tax and depreciation, grew by 8.1 percent to €442 million during the first three quarters of 2005. The Group profit of €136 million was 14.6 percent higher than the comparable figure for 2004. The company’s earnings per share increased from €1.30 to €1.49.

One of the positive developments taking place during the first nine months of the 2005 was the signing of a new five-year aircraft-handling contract with Lufthansa, Fraport’s key customer in Frankfurt. Above all, this agreement provides planning security for Fraport and its 5,900 specialists working in the Ground Handling strategic business area.

Within the scope of Fraport’s ongoing cost-reduction program, an additional EBITDA contribution of more than €40 million is expected for 2005. This would result in a total of about €120 million since the launch of the internal corporate “fitness” program.

Fraport’s stock price also reflects the company’s solid performance. Germany’s first airport stock started the 2005 year at a high level. During the first three quarters of 2005, Fraport’s stock value was able to climb by a further 39.5 percent.

Theodore Koumelis
Co-Founder & Managing Director - Travel Media Applications | Website

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.