Københavns Lufthavne A/S
Half Year financial report
Interim report of Copenhagen Airports A/S (CPH) for the six months to 30th June 2011
INTERIM REPORT OF COPENHAGEN AIRPORTS A/S (CPH) FOR THE SIX MONTHS TO 30 JUNE 2011
The Board of Directors today approved the interim report for the period 1 January – 30 June 2011.
Summary for the first six months of 2011
A 9.2% increase in passenger numbers meant that Copenhagen Airports A/S (CPH) delivered a strong H1 performance with good underlying growth. The growth was achieved through an increase in locally departing domestic and international passengers, more parking customers and higher sales in the shopping centre. CPH retains its forecast for the full year of continuing growth in the total number of passengers.
The underlying EBITDA increased by 4.2% when excluding one-off items and adjusting for the sale of CPH’s investment in a number of Mexican airports (ITA), the termination of a long-term rental contract with SAS Cargo and the effect of the ash cloud in 2010. Compared with 2010, reported EBITDA declined from DKK 900.4 million to DKK 820.9 million, when excluding one-off items.
The full-year effect of the many new routes CPH attracted in the course of 2010 had a positive impact on traffic revenue, and with respect to the shopping centre, the many new shops opened in the past year have filled all vacant space in the centre. This means that total sales are rising and that sales per passenger has increased thanks to the broader product offering CPH has established as part of the successful implementation of the new strategy for the shopping centre.
During the first six months of 2011, shops such as Day, H&M, Lagkagehuset, Hamleys and Molo have opened at Copenhagen Airport. Moreover, parking revenue has increased 11.4% since CPH introduced a new concept with simpler pricing in 2010.
Focus on Asia
A number of airlines have opened new routes to Copenhagen in 2011, and additional capacity or more frequencies have been added to existing routes, which has strengthened the route network. The services of the three Gulf airlines, Emirates, Qatar Airways and Gulf Air, to Dubai, Doha and Bahrain, respectively, increase the accessibility to and from the Middle East as well as increasing the number of connections to south-east Asia, India and Australia.
These three routes form the backbone of continuing growth to the Middle East, and the SAS route to Shanghai starting in 2012 will enhance connections to Asia. CPH will continue to focus on the opportunities in Asia going forward to satisfy the growth potential in the region. This will help to ensure that Copenhagen Airport supports Denmark as a nation to participate in the growth in Asia.
Highlights of the results
Passenger numbers at Copenhagen Airport increased by 9.2% during the first six months of 2011. The number of locally departing passengers increased by 12.7%, and transfer traffic decreased by 2.1%. When excluding the impact of the ash cloud in 2010, underlying passenger growth was 4.6%
Underlying revenue growth was 6.2% when excluding one-off items. Reported revenue decreased by 1.0% to DKK 1,586.9 million (2010: DKK 1,603.2 million) primarily due to the divestment of ITA, the termination of a long-term rental contract with SAS Cargo and the effect of the ash cloud in 2010. This was partly offset by an increase in passenger numbers.
When excluding one-off items, underlying EBITDA grew by 4.2%. Reported EBITDA decreased by 6.9% to DKK 804.4 million (2010: DKK 864.4 million).
Underlying EBIT grew by 1.8%, when excluding one-off items. Reported EBIT decreased by 13.2% to DKK 546.7 million (2010: DKK 629.6 million).
Net financial expenses decreased by DKK 55.4 million primarily caused by an extraordinary amortisation of loan costs in connection with repayment and cancellation of bank facilities in June 2010 and market value adjustments in 2010 of which the main part relates to a loss in connection with termination of interest rate swaps
Profit before tax decreased to DKK 436.9 million (2010: DKK 480.6 million). Profit before tax amounted to DKK 453.4 million when excluding one-off items (2010: DKK 516.6 million) primarily due to the divestment of ITA in October 2010 and the termination of a long-term rental contract with SAS Cargo partly offset by an increase in passenger numbers
Capital expenditure amounted to DKK 333.0 million in the first six months of 2011 (2010: DKK 323.9 million)
In March 2011, CPH cancelled undrawn bank facilities equivalent to DKK 924.9 million maturing in March 2012. Concurrently, CPH established four five-year committed bilateral bank facilities totalling DKK 2.0 billion. The new facilities have resulted in significantly improved terms for CPH and address all short- to medium-term refinancing risk. Moreover, the new facilities ensure that CPH will be able to meet its commitments under the charges agreement to invest DKK 2,625 million in the period from 1 October 2009 to 31 March 2015, whilst providing sufficient financial resources to fund additional investments
Based on the expected traffic programme for 2011, the total number of passengers is expected to continue to increase. Operating costs are expected to be higher, primarily due to the forecast growth in passenger numbers, cost inflation and depreciation as a result of the higher level of investments. Overall, profit before tax is expected to be on a level with 2010 when excluding one-off items.
Under the charges agreement, CPH is committed to investing an average of DKK 500 million annually supplemented by commercial investments for the benefit of airlines and passengers.