Københavns Lufthavne A/S
Half Year financial report

Interim financial report of Copenhagen Airports A/S (CPH) for the period 1 January – 30 June 2016

Stock Exchange Announcement 2016

Copenhagen, 10 August 2016

INTERIM REPORT OF COPENHAGEN AIRPORTS A/S (CPH) FOR THE PERIOD 1 JANUARY – 30 JUNE 2016 

The Board of Directors has today approved the interim report for the period 1 January – 30 June 2016.

Summary for the first half of 2016

The first half of 2016 has seen a strong performance for Copenhagen Airports A/S (CPH). Revenue grew by 10.1%, which is in line with the growth in passenger numbers, partly because of the flat development in charges in real terms. Profit before tax increased by 20.0% to DKK 123.8 million due to a combination of passenger growth and the continued focus on efficiency, reducing costs per passenger by 3.9% compared to the same period last year, despite heavy investment in the security area. Based on the strong growth, CPH expects to end the year above the outlook of 12 May 2016 and is therefore upgrading its full-year outlook for profit before tax.

A total of 13,704,859 passengers travelled through Copenhagen Airport in the first half of 2016. This is an increase of 1,359,030 or 11.0% compared to the first half of 2015 with 12,345,829 passengers used the airport. Locally departing passengers increased by 12.2% and transfer passengers by 7.9%. Long-haul intercontinental traffic increased by 11.2% and European traffic by 11.3%, with domestic traffic also showing solid growth of 7.0%. 

The high growth in passenger numbers in the first half of 2016 can largely be attributed to new airlines and new routes, which are helping to bring more tourists and business travellers to Denmark. An analysis by CPH show that the number of tourists travelling to Copenhagen increased by 27.2% in the first quarter of 2016.  According to a report from 2016 by DAMVAD Analytics, the many new passengers and routes have generated growth of around DKK 1.7 billion in Denmark in the past six months.

High level of capital expenditure maintained

The high level of growth and value creation means that CPH has maintained a very high level of capital expenditure, investing DKK 372.2 million in the first half of 2016. This can be attributed in particular to expansion of capacity at the central security checkpoint (CSC), where CPH is investing more than DKK 250 million.

Improved efficiency despite heightened security requirements

CPH continues to maintain a strong focus on efficiency improvements, despite the fact that higher traffic and increasingly stringent regulations have led to a significant increase in security-related staff costs.

In June 2016, Copenhagen Airport was named the most efficient in Europe by the Air Transport Research Society (ATRS), an independent body of researchers and experts in airport operations. ATRS assessed productivity, costs, quality and efficiency at more than 200 airports worldwide, with Copenhagen Airport named "Europe’s most efficient airport" for the 11th time in 13 years.

Interim dividend

Based on the half-year profit, the Company has adopted an interim dividend. The dividend amounts to DKK 565 million, equivalent to DKK 72.00 per share.

Highlights of results            

• Passenger numbers at Copenhagen Airport grew by 11.0% in the first half year of 2016. The number of locally departing passengers grew by 12.2% and the number of transfer passengers grew by 7.9%.

• Revenue grew by 10.1% to DKK 2,108.6 million (2015: DKK 1,915.3 million), mainly driven by the 11.5% increase in locally departing international passengers and increased revenue from parking. 

• EBITDA, excluding one-off items, increased by 13.1% to DKK 1,175.1 million (2015: DKK 1,039.2 million). Reported EBITDA rose by 13.0% to DKK 1,167.9 million (2015: DKK 1,033.7 million).

• EBIT, excluding one-off items, increased by 16.3% to DKK 838.5 million (2015: DKK 720.9 million).  Reported EBIT rose by 16.2% to DKK 831.3 million (2015: DKK 715.4 million). 

• Net financing costs were down by DKK 7.9 million year on year.

• Profit before tax, excluding one-off items, was up by 20.1% to DKK 750.3 million (2015: DKK 624.8 million). Reported profit before tax was up by 20.0% to DKK 743.1 million (2015: DKK 619.3 million).

• Capital expenditure was DKK 372.2 million in the first half of 2016 (2015: DKK 450.5 million). The first half of 2016 was marked by expansion of capacity at the central security checkpoint, renovation of the western landside apron, development of wide-body bus facilities, renovation of aircraft stands and various maintenance improvement projects.

• The dividend of DKK 565.0 million will be distributed on 15 August 2016 via VP Securities Services  based on the holdings registered in VP accounts on 12 August 2016 at the end of the business day. Consequently, shares purchased for settlement on or before 12 August 2016 will carry a dividend, whereas shares sold for settlement on or before 12 August 2016 will lose the right to a dividend. This means that transactions up to and including 10 August 2016 will be settled cum dividend, and transactions from and including 11 August 2016 will be settled ex dividend when traded at normal two-day settlement.

Adjustment of CPH’s policy for company announcements

Effective as of today, CPH will discontinue monthly disclosure of traffic statistics as a company announcement. Traffic statistics will instead be a part of CPH’s annual and interim financial reporting and may be published as press releases.

Outlook for 2016

Based on the strong growth, CPH expects to end the year above the outlook of 12 May 2016 and is therefore upgrading its full-year outlook for profit before tax relative to the previous outlook.

Outlook for profit before tax

Based on the expected traffic programme for 2016, an increase in the total number of passengers and revenue is expected. 

The development in passenger numbers is a dynamic factor that is subject to both positive and negative influence from general economic developments, decisions by airlines relating to routes and capacity, and isolated events in the aviation industry. 

Operating costs are expected to be higher than in 2015, primarily due to the expected rise in passenger numbers, stricter security requirements and cost inflation, but this will be partly offset by a continuing focus on operating cost efficiencies.

Overall, depreciation charges and financial costs are expected to be in line with 2015, primarily as a result of a continued high investment level, partly offset by lower borrowing costs.

Profit before tax in 2016 is now expected to be in the range of DKK 1,550-1,650 million, excluding one-off items. The previous outlook was for profit before tax in the range of DKK 1,450-1,550 million. EBITDA is projected to be higher in 2016 than in 2015, excluding one-off items.

Outlook for capital investment

CPH expects to continue to invest in growth for the benefit of passengers and airlines. As in recent years, CPH expects capital investments to remain at a high level in 2016. Planned investments include two additional lanes at the central security checkpoint, the expansion of passport control in Pier C with self-service passport control for EU citizens, Pier C bus gates, an upgrade of the baggage reclaim area, and a redesigned passenger drop-off zone in P4. CPH will also be investing in non-aeronautical projects for the benefit of airlines and passengers.