Despite the handling chaos of the past few weeks, significantly more passengers are using Frankfurt Airport again. The listed operator Fraport therefore raised its annual forecast significantly to 45 to 50 million guests on Tuesday. Previously, 39 to 46 million passengers were expected for the largest German hub. The pre-Corona year 2019 marked the record with more than 70 million passengers.
In June, the 5 million monthly mark was exceeded again for the first time and thus more than 75 percent of the pre-crisis level was reached. However, the deficiencies that arose in handling have led to long waiting times, lost luggage and flight cancellations. “This very dynamic recovery demands a lot from us operationally and repeatedly leads to unsatisfactory unpunctuality,” explained Fraport boss Stefan Schulte. We are still a long way from meeting our own quality requirements.
However, the measures taken have had an effect and have led to stable and regulated operations “by and large,” said Schulte. In July, in addition to the scheduled flight cancellations, the one-day Verdi warning strike by Lufthansa ground staff also weighed on the figures, so that according to preliminary information only 72.5 percent of the pre-crisis figure was reached.
In terms of freight, Fraport registered a decline of 11.5 percent for Frankfurt in the first half of the year compared to the same period of the previous year. The closed airspace over Russia and the zero-Covid strategy in China are having a negative impact here.
Special effects affect the business
Two special effects also influence profit expectations. The sale of the shares in Xi’an Airport in China is expected to increase consolidated earnings before interest and taxes (EBIT) to between EUR 400 and 520 million (previously: EUR 320-440 million). At the same time, however, Fraport has completely written off its commitment at the airport in St. Petersburg because of the sanctions against Russia. Therefore, the bottom line is that the consolidated profit will only reach 0 to 100 million euros instead of 50 to 150 million.
From an accounting point of view, Fraport has thus lost its loan claim of 163.3 million euros from Thalita Trading Ltd, which holds the stake in the operating company of the airport in St. Petersburg. Schulte explained that the value adjustment should not be confused with a sale of shares. “We are fully adhering to our claims. Contractually, a sale is still excluded until 2025.”
In the second quarter, Fraport surprisingly increased its revenue by 90 percent to 809 million euros compared to the same period of the previous year, which was affected by the pandemic. Earnings before interest, taxes, depreciation and amortization (Ebitda) increased by 14 percent to almost 338 million euros and were thus higher than average analysts had expected. However, the profit attributable to the shareholders fell by more than 30 percent to a good 59 million euros as a result of the Russia write-off.
Fraport Quarterly Statements Communication Fraport Q2/2022
