Dynamic growth in passenger volumes significantly boosts revenue and operating result. Net profit again positive at 98 million euros; Fraport expects to achieve upper range of full-year outlook.
Airport operator Fraport has significantly increased its revenue and operating key figures for both the third quarter and the first nine months of the 2022 fiscal year (corresponding to the calendar year in Germany). The company has benefited from a strong resurgence in the demand for air travel. The expectation for the fourth quarter also remains optimistic. For 2022 as a whole, Fraport is aiming for a result at the upper end of the forecasts. Likewise, passenger volumes in Frankfurt are expected to reach the upper range of predictions, between about 45 and 50 million.
“Over the past nine months, demand has surged dynamically. Following a modest start early in the year due to the braking effect of the Omicron variant of the coronavirus, the volume accelerated significantly from March into the fall,” says CEO Dr. Stefan Schulte of Fraport AG. “This brisk growth is being driven by strong demand from leisure travelers. The airports of Fraport’s international portfolio that are located in popular holiday regions are benefiting to an especially great extent from this trend. Our Greek airports have performed particularly well, even exceeding the volumes of pre-crisis 2019 during the first nine months of the year. In the third quarter we also significantly boosted the Group’s net profit, which had still been negative in the first half of the year as a result of the complete write-off of our investment in Russia.”
Vigorous recovery of passenger volumes
In the first nine months of 2022, Frankfurt Airport (FRA) welcomed a total of 35.9 million passengers. The year got off to a weak start due to the Omicron variant, but then demand rebounded quickly driven mainly by leisure travelers. In several months of the current fiscal year, passenger volumes consistently exceeded the levels of the corresponding period of 2021 by more than 100 percent. The peak was reached in April 2022, when the number of travelers more than tripled compared to the corresponding month of 2021.
Commenting on the summer travel surge, Dr. Schulte said: “Following the aviation industry’s longest and most painful crisis ever, the extremely rapid growth in passenger volumes posed numerous challenges. Thanks to early and close coordination with our partners and jointly implemented measures, we nevertheless succeeded in ensuring largely stable and orderly operations for the around 7.2 million passengers that traveled from Frankfurt Airport during the summer school holidays in Hesse. It has also been very important to us to provide a positive travel experience. To ensure this going forward, we are continuing to work hard to expand our operational resources. This year alone, for example, we have recruited about 1,800 new employees for baggage handling.”
Across the Group, the airports of Fraport’s international portfolio also experienced a sharp increase in passenger traffic. Fraport’s 14 Greek airports boasted especially pronounced growth during the period from January to September 2022, exceeding the pre-crisis levels of 2019 by 3.1 percent. In the third quarter of 2022, Fraport's Group airports outside Germany, serving primarily as tourism gateways, recovered at a particularly lively pace – returning to 93 percent of the passenger levels registered in the same period of 2019. FRA, with its considerably more complex hub functionality, reached about 74 percent of the 2019 passenger levels in the third quarter of 2022.
Third quarter of 2022: Group result improves significantly
The sustained strong passenger demand during the summer travel season pushed Group revenue up by 46.0 percent year-on-year to 925.6 million euros in the third quarter of 2022 (Q3/2021: 633.8 million euros; in each case, adjusted for revenues resulting from construction and expansion measures at Fraport’s subsidiaries worldwide as per IFRIC 12). Group EBITDA improved to 420.3 million euros, just four percent short of the level of 2019 (Q3/2021: 288.6 million euros). The principal driver was the company’s international business, which set a new record by accounting for 62 percent of EBITDA in the third quarter. Buoyed by positive operational figures, the Group result (net profit) rose by 47.4 percent year-on-year to 151.2 million euros in the third quarter of 2022 (Q3/2021: 102.6 million euros).
First nine months of 2022: strong increase in revenue
The first nine months of 2022 saw a significant gain in Group revenue, which rose by 57.6 percent year-on-year to some 2.137 billion euros (the figure for the corresponding period of 2021 was approx. 1.357 billion euros, in each case adjusted for IFRIC 12). The EBITDA or operating result advanced by 32.8 percent year-on-year to 828.6 million euros (9M/2021: 623.9 million euros). In the first nine months of 2021, EBITDA was additionally boosted by some 333 million euros due to one-off effects. Without these, EBITDA for this year's 9M-period would have increased by over 100 percent. The Group result (net profit) also benefited from this positive trend, reaching 98.1 million euros. Nevertheless, the figure still represented a decline of 16.9 percent year-on-year (9M/2021: 118.0 million euros). This was mainly due to the full write-off of Fraport's investment in Russia to the amount of 163.3 million euros, realized in the first half of 2022. Even two large positive contributions fell short of offsetting the loss resulting from this write-off: namely the proceeds from the sale of Fraport’s share of Xi’an Airport in China (generating about 74 million euros) and compensation for Covid-induced losses of business in the first half of 2021 from Greece that was registered in the third quarter of 2022, adding approximately 24 million euros.
Outlook: upper range of forecasts expected for full-year 2022
In view of the positive trend during the first nine months of 2022 and the stable outlook for the fourth quarter, Fraport expects to reach the upper range of the forecast, as adjusted in the interim report on the first half. For Frankfurt, Fraport still anticipates a total passenger volume of between about 45 and 50 million. Revenue is expected to slightly exceed 3 billion euros for 2022 as a whole. EBITDA is projected to reach between about 850 million euros and 970 million euros, while EBIT is expected to be in the range from approximately 400 million euros to 520 million euros. The forecast window for the Group’s profit extends from zero to around 100 million euros. In line with previous reports, the Fraport executive board will uphold its recommendation to refrain from disbursing any dividends for fiscal 2022.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
