Fraport Fiscal Year 2002: Manila Write-down Overshadows Successful 2002 Business Year / Sales Increase 14 Percent / Adjusted EBITDA Exceeds EUR 500 Million
Frankfurt, Germany (ots) - For fiscal year 2002 Fraport AG has made a
complete write-down - in the context of its business caution and conservative
balance-sheet policy - on its financial investment in the new International
Passenger Terminal 3 (IPT 3) project at Ninoy Aquino International Airport
(NAIA) in Manila, the Philippines. This exceptional write-down overshadowed
positive results in the Group's operating business: Excluding the exceptional
write-down for Manila, the 2002 EBITDA (earnings before income, tax,
depreciation and amortization) of EUR 503 million almost reached the previous
year's level. "In these difficult global economic and political times, we have
achieved a precise landing and successful business results," said Dr. Wilhelm
Bender, Executive Board Chairman of Fraport AG.
Nevertheless, because of this exceptional effect of EUR 290 million resulting
from the Manila write-down, the Fraport Group had an annual net loss of EUR 121
million and retained earnings were zero after a release from capital reserves
for 2002. As a result, no dividend payments will be made for fiscal year 2002.
The Fraport Group sales increased in the reporting year by 14 percent to EUR
1.8 billion. This noticeable increase can be attributed primarily to the full-
consolidation of ICTS Europe, a wholly owned subsidiary of Fraport since January
2002 and the European market leader for aviation security services.
Even when adjusted by this consolidation effect, Fraport's sales grew
strongly by four percent over the previous year. The major factors contributing
to this were mainly the increase in airport charges at Frankfurt Airport at the
beginning of 2002, as well as continued good growth in retail revenues. Proceeds
from retail and duty-free shops increased by over 12 percent to EUR 67.6
The Fraport Group's total output reached EUR 1.9 billion. Material expense
grew by four percent to EUR 527 million over the previous year. The increase in
personnel costs of about 25 percent to EUR 860 million was mainly due to the
first-time full consolidation of ICTS Europe, a very manpower-intensive
operation. Thus, the Fraport Group employed an average of 21,395 people during
2002, 5,869 more than in the previous year.
In contrast to the trend towards a worldwide slump in the industry, more than
69 million passengers used the airports of the Fraport Group in 2002, a 2.5
percent increase over 2001. Cargo tonnage handled by the Group's airports
increased 2.6 percent to 1.9 million metric tons. The number of aircraft
movements grew 1.1 percent to 717,700 take-offs and landings.
Frankfurt Airport (FRA) recorded 48.5 million passengers, 70 percent of the
total Group passenger volume in 2002. The amount of airfreight handled
increased at FRA by 1.4 percent to 1.5 million metric tons, while airmail
remained unchanged over the previous 2001 with 141,000 metric tons. Some
458,000 aircraft movements were registered in 2002, 0.4 percent more than in the
previous year. The maximum take-off weights (MTOWs) declined 2.5 percent as a
result of the airlines adapting their capacities and increasingly using smaller
aircraft; the seat-load factor (aircraft capacity utilization) increased 1.6
percentage points to 69.8 percent.
The positive development of the most important key indicators in a difficult
economic environment confirms, said Bender, "that Fraport AG is an extremely
healthy operating company." Furthermore, the concentration of airlines at hub
airports during times of crisis - experienced in 2002 and continued in 2003 -
indicates that Frankfurt Airport's hub position must be maintained and
strengthened, declared Fraport's Bender.
This also includes the market-driven expansion of capacity at FRA via the
construction of a new landing runway. "Our Airport Expansion Plan will not be
endangered by the Manila write-down or by the current traffic situation
resulting from the Iraq war, the SARS epidemic and the global economic slowdown,
stressed Bender. "After all, the long-term growth trend in passenger traffic
always remained intact even after significant market-incisions such as the Gulf
war or terrorist attacks," Bender said.
Therefore, Fraport is carefully preparing the documents required for the
zoning procedure on the new Runway Northwest (for landings only), which the
company will request this summer. Scheduled to be completed by the end of
2006, this runway will boost FRA's capacity to about 660,000 movements per year.
Coinciding with the opening of the new runway, Fraport will apply for a ban on
nighttime flights between 23:00 and 05:00. "We are strictly complying with the
mediation results," Bender emphasized again. "No airport expansion without a
ban on nighttime flights and no ban on nighttime flights without airport
Currently, Fraport does not see itself in a position to give a reliable
forecast on the development of the entire year 2003. The recovery of passenger
figures took root in 2002 and continued through the first few months of the
current year. However, the war in Iraq put a preliminary halt to this positive
development. Furthermore, the economic slowdown and the outbreak of SARS
depressed demand for business travel and dampened the desire for tourist travel.
Bender said that Fraport currently assumes the 2002 passenger levels "will
not be fully reached". In contrast, Fraport expects a clear increase in cargo
activity and slight increases in aircraft movements and MTOWs. "Despite the
many insecurities existing among consumers, we expect EBITDA and the Group's
net income for 2003 to exceed the 2002 figures adjusted for the exceptional
Manila effect," said Bender. "We are optimistic that we will again be able to
pay our shareholders a dividend for fiscal year 2003, provided the Iraq
conflict, SARS, and the weak economy will not create further risks for us."