During the first half of fiscal 2019 (ending June 30), the Fraport Group achieved growth in both revenue and earnings. Group revenue increased by 5.2 percent to EUR1,513.9 million, after adjusting for revenue in connection with capital expenditures made for expansion projects at Fraport's Group airports worldwide (according to IFRIC 12). At Frankfurt Airport, factors contributing to revenue growth included higher proceeds from ground handling services and infrastructure charges, as well as from the retail and parking business. In Fraport's international portfolio, major contributions came from the Lima Airport Partners subsidiary in Peru, as well as from Fraport USA and Fraport Greece.
The operating result or Group EBITDA (earnings before interest, taxes, depreciation and amortization) advanced by 10.9 percent or by EUR50.2 million to EUR511.5 million in the reporting period. This amount includes a EUR22.8 million positive effect resulting from the first-time application of the IFRS 16 accounting standard. When adjusting for this effect, EBITDA grew by EUR27.4 million or 5.9 percent. The increase can be attributed, in particular, to the positive performance of the Ground Handling and Retail & Real Estate business segments in Frankfurt, with both segments benefitting, among other things, from traffic growth at Frankfurt Airport.
Effective January 1, the mandatory IFRS 16 international financial reporting standard establishes new rules for the accounting of leases. Specifically, this affects the accounting of lease contracts concluded by the Group's Fraport USA subsidiary. The application of IFRS 16, on the one hand, led to lower operating expenses with a
respective positive impact on EBITDA. On the other hand, this positive effect was offset by higher amortization and depreciation in
the amount of EUR21.6 million and by a EUR5.8 million increase in interest expense. Thanks to an overall improved financial result, the Group result (net profit) rose by EUR24.1 million or 17.1 percent to EUR164.9 million in the reporting period.
Fraport AG's executive board chairman, Dr. Stefan Schulte, commented: "In the first half of 2019, we successfully held our ground amid the
overall challenging market environment. I am particularly pleased that we have been able to further increase our passenger satisfaction levels despite intensified peak traffic, while also reducing wait times at the security checkpoints. We remain strongly committed to
further optimizing our processes."
In the January-to-June 2019 period, operating cash flow expanded by 13.0 percent to EUR367.5 million. In contrast, free cash flow
decreased noticeably - as forecast - by EUR282.5 million to minus EUR305.7 million. This was due to higher capital expenditure at Frankfurt Airport and some Group airports in Fraport's international portfolio. Frankfurt Airport (FRA) welcomed more than 33.6 million passengers in the first six months of 2019, representing an increase of 3.0 percent
year-on-year. Most of Fraport's Group airports worldwide also recorded passenger growth in the reporting period. Only the two Bulgarian airports of Varna (VAR) and Burgas (BOJ) saw combined traffic drop by 12.9 percent, with this trend expected to continue
over the course of the year.
For the full year 2019, Fraport AG's executive board is maintaining its traffic forecast for FRA, where passenger numbers are expected to
rise between about two and three percent. The executive board also confirmed the company's financial outlook for the 2019 business year, as outlined in the Annual Report 2018: Group EBITDA between about EUR1,160 million and EUR1,195 million; Group EBIT between about EUR685 million and EUR725 million; Group EBT between about EUR570
million and EUR615 million; and Group result (or net profit) between about EUR420 million and EUR460 million.