The Fraport global airport company achieved growth in all major key financial indicators during the first half of 2023 (ending June 30). The increase was supported by higher passenger volumes across the Group’s airports. Group revenue rose by 33.8 percent year-on-year to €1,804.3 million in the first six months of 2023. The operating result or EBITDA (earnings before interest, taxes, depreciation, and amortization) reached €481.4 million, up 17.9 percent. The Group’s result (or net profit) climbed to €85.0 million in the reporting period. In the first half of the previous year, this key figure was still negative at minus €53.1 million, due to a one-off effect.
Dr. Stefan Schulte, CEO of Fraport AG, said: “In the second quarter of 2023, the positive performance continued from the start of the year. We are seeing sustained recovery in passenger demand across our portfolio of global airports. At our home base in Frankfurt, passenger numbers recovered to 80 percent of pre-crisis levels in the first half of 2023. We expect passenger traffic to further grow at Frankfurt Airport during the full year – including a rise in the share of business travelers. Our leisure-dominated Group airports worldwide have benefited most from the ongoing strong demand for holiday travel. This is particularly true for the Greek airports, which continued to clearly surpass the levels from pre-crisis 2019 during the first six months.”
Key financial indicators improve in the first half
Applying the IFRIC 12 adjustment (for revenues from construction and expansion measures at Fraport’s international subsidiaries), Group revenue increased by 27.8 percent year-on-year to €1,548.6 million in the first six months of 2023. For the first time, the Group’s 6M revenue includes proceeds from aviation security fees (totaling €106.4 million) levied by Fraport after assuming responsibility for security screening at Frankfurt Airport at the start of 2023. On the other hand, proceeds from security services provided by FraSec Aviation Security GmbH (totaling €75.6 million in 6M/2022) were no longer recognized as Group revenue, after this subsidiary was de-consolidated from the Group’s financial statements effective January 1.
With the operating result (EBITDA) improving to €481.4 million, the Group’s operating profit (EBIT) increased to €245.9 million in the first half of 2023, up 35.2 percent year-on-year. Correspondingly, operating cash flow grew to €293.8 million (6M/2022: €185.3 million). Free cash flow also improved noticeably to minus €377.5 million in the reporting period (6M/2022: minus €733.8 million). The achieved Group result (net profit) of €85.0 million translated into undiluted earnings per share of plus €0.87 (6M/2022: minus €0.53).
Passenger traffic growing across the Group
Passenger numbers at Frankfurt Airport (FRA) surged by 29.1 percent year-on-year to 26.9 million in the first six months of 2023 – thus recovering to 79.9 percent of the pre-crisis levels achieved in 2019. European traffic benefited from strong demand for leisure travel to warm-weather destinations. Business travel within Europe also gradually improved, particularly to and from West Europe’s financial hubs. Intercontinental traffic saw high growth rates specifically for holiday destinations in North and Central Africa and the Caribbean. Traffic to and from North America also recorded strong passenger volumes, almost reaching pre-pandemic levels again. In contrast, traffic to and from China continued to lag behind this general trend, reaching only about a third of the 2019 level.
Among Fraport’s international portfolio of airports, the gateways in Greece led the line in the first half of 2023. At the 14 Greek regional airports, accumulated passenger numbers even surpassed the pre-crisis levels from 2019 by as much as 7.8 percent. Next was Antalya Airport (AYT) on the Turkish Mediterranean coast with a 96.2 percent recovery rate, followed by Peru’s Lima Airport (LIM) achieving a recovery rate of 85.4 percent compared to 6M/2019. At the two Brazilian airports of Fortaleza (FOR) and Porto Alegre (POA), combined traffic recovered to 84.7 percent of the pre-pandemic 6M/2019 levels. Further details on the Fraport traffic figures are available here.
More precise projections provided for a full-year outlook
After the conclusion of the first half, Fraport’s executive board has updated its 2023 full-year outlook for Frankfurt Airport providing more precise projections for the relevant key indicators. Passenger numbers in Frankfurt are expected to reach the middle range of the previously given projection of between at least 80 percent and up to 90 percent of traffic levels seen in 2019 when some 70.6 million passengers traveled via Germany’s largest aviation hub. The executive board is also maintaining the financial guidance for FY 2023, while providing more precise projections. As far as the Group EBITDA is concerned, Fraport now expects to reach the upper half of the previously projected range of between about €1,040 million and €1,200 million. Likewise, the Group result is now expected in the upper half of the projected range of between some €300 million and €420 million.