Fraport AG maintains results forecast despite difficult market conditions

FRA> Fraport AG Frankfurt Airport Services Worldwide released today its mid-term company report for the first six months of financial year 2003. The airport operator achieved a sales increase of 2.6 percent to €877.7 million. Despite a slight decrease in earnings in the first half-year, Fraport expects an EBITDA of €500 million.

Against the background of the after-effects of the Iraq conflict, SARS and the continued worldwide economic downturn, Fraport registered a fall in sales from airport charges, which are directly related to the volume of air traffic. The sales increase for the Fraport Group resulted from the rise in demand for security services (including the 100-percent baggage checks that have been required since January 1, 2003), from which both Frankfurt Airport as well as the Fraport subsidiary ICTS Europe, the European market leader for aviation-related security services, have benefited.

Group-wide, Fraport recorded 30.9 million passengers, a 1.6 percent decline versus the same period last year. 22.5 million passengers used Frankfurt Airport, the Group�'s most important location, 2.1 percent fewer than in the first half of 2002. Antalya was particularly affected by the war in Iraq and recorded a 16.6 percent decline in the number of passengers. Positive developments were posted in the volume of cargo traffic and number of aircraft movements: Airfreight and airmail volumes rose at Frankfurt Airport by 2.2 percent to 798,556 metric tons; the number of take-offs and landings increased by 1.4 percent to 225,665.

As of the end of June, Fraport employed 23,164 staff. Sales growth in the area of security services was offset by higher costs caused by the higher staff levels required. This was the primary factor contributing to the 7.7 percent rise in personnel costs to €461.6 million. Group-wide, non-staff costs sank by 7.1 percent to €229.3 million.

The unfavourable economic conditions negatively affecting passenger traffic, primarily at Frankfurt Airport, dampened period results. At €226.1 million, EBITDA were 3.4 percent below first half-year 2002; the EBITDA margin decreased by 1.6 percentage points to 25.8 percent.

Fraport achieved results from ordinary business activities amounting to €103.3 million, a decline of 9.4 percent compared to the same period last year. At €50.2 million, company earnings were 6.3 percent below first half-year 2002. Earnings per share in line with IFRS declined from €0.59 to €0.56.

As a result of the Iraq war, SARS and weak economic developments, the number of passengers at Frankfurt Airport for full-year 2003 are expected to remain slightly under last year. Should no further extraordinary events occur, Fraport expects to achieve EBITDA and annual net income equivalent to last year�'s results, adjusted for the effects relating to Manila.