Fraport Interim Report 3rd Quarter 2004: Positive Trend Continues - 2004 Sales and Earnings Forecast Revised Upward / Situation in Air Transport Industry / Requires Cost Reductions

Frankfurt/Main, Germany (ots) - Fraport AG Frankfurt Airport Services Worldwide achieved an 8.7 percent increase in sales to EUR1,487.4 million in the first

nine months of fiscal 2004. The Group's EBITDA (earnings before

interest, tax, depreciation and amortization) of EUR409 million

exceeded the previous year's figure by 10.5 percent

Some 58.9 million passengers used the Fraport Group's airports

during the first nine months of 2004, 10.5 percent more than in the

corresponding period last year. Frankfurt Airport (FRA) served 38.8

million passengers, an increase of 6.4 percent. Furthermore, FRA

limited landing capacities could be better utilized: Maximum takeoff

weights (MTOWs) - an indicator of the size of aircraft used - rose by

6.7 percent. At the same time, the seat load factor (i.e., aircraft

capacity utilization) increased 2.1 percentage points. Antalya

Airport (AYT) in the Turkish Mediterranean benefited from a revival

in tourism traffic to this region. Passenger figures at AYT soared

by 31.4 percent to 9.8 million. Frankfurt-Hahn Airport (HHN), which

focuses on the low-cost segment, continued its success story by

growing 17.4 percent to 2.1 million passengers.

Cargo tonnage (airfreight and airmail) handled at Frankfurt Airport

reached the record level of 1,334,509 metric tons, exceeding the

first nine months of 2003 by 11.1 percent.

In addition to higher proceeds from traffic charges, Fraport also

achieved a noticeable increase in revenue from security services,

because an EU directive required further tightening of security

procedures at European airports at the beginning of 2004.

Furthermore, Fraport's ICTS Europe subsidiary, which specializes in

aviation security services, was able to expand its business to new

customers and new locations.

As a result, ICTS' staff requirements increased. In the first nine

months of 2004, the company's work force was 10.2 percent larger than

in the same period of 2003. This manpower increase and increases in

pay rates were responsible for the Group-wide increase of 5.5 percent

in personnel costs to EUR726 million. The Fraport Group's total

number of employees averaged 23,935, an increase of 2.6 percent over

the previous year.

Non-personnel costs grew 9.7 percent to EUR384.3 million, mainly

because of increased maintenance and repair costs - in particular,

the terminal modernization and Runway North renovation projects at

FRA.

Due to stringent cost management, total personnel and non-personnel

costs increased by only 6.9 percent and thus did not rise as fast as

sales (up 8.7 percent). This productivity improvement is reflected in

a 10.5 percent increase in EBITDA to EUR409 million.

With EUR16 million, the financial result fell EUR18.7 million short

of the previous year's level. Income from investments was markedly

higher in 2003, because it still contained EUR8.5 million in dividend

payments from Antalya for fiscal 2002. Since 2003, such dividend

payments have been made "in phase," meaning dividends have been

collected at the end of the fiscal year for which they are due.

Furthermore, financial results for the January-to-September 2004

period were depressed by a negative balance of foreign currency

translations.

The Fraport Group was able to improve profits in the first three

quarters of 2004 by 10.5 percent to EUR117.2 million, compared to

the same period last year. Earnings per share according to IFRS

(International Financial Reporting Standards) grew from EUR1.18 Euro

to EUR1.30.

In view of the positive development of the operating business in the

first nine months, Fraport is revising its forecast for sales and

earnings in fiscal 2004 upward. Fraport expects sales revenues to

grow by at least 7.5 percent and EBITDA by slightly more than 10

percent. Correspondingly, Group profits are expected to rise

over-proportionately, provided there will be no negative influences

during the last few weeks of the year. Fraport AG's executive board

plans to increase the payout ratio.

Fraport's executive board chairman Dr. Wilhelm Bender explained that,

the good results not withstanding, Fraport AG will face heavy

challenges over the next few years because of growing costs pressures

in the air transport industry. Examples of such challenges include

the prices for ground handling services and so-called concession fees

at Frankfurt Airport, Bender said. Fraport's ground-handling

contract with Lufthansa will be expiring at the end of 2005.

Therefore, it should be in the interest of both contract partners to

find a competitive solution to continue this longstanding and

successful cooperation at Frankfurt Airport in 2006 and beyond.

Bender pointed out that the company's successful WM 2005 value

enhancement program, which will be continued, provides an excellent

foundation for the months and years ahead. Nevertheless, further

cost reductions will be necessary. "Fraport is economically sound,"

Bender said. "Based on this sound position, we are already prepared

today to meet the expected challenges of tomorrow - for the benefit

of our customers, our shareholders and for sustained job security."