SUMMARY FOR THE FIRST SIX MONTHS OF 2010
A 5.7% increase in passenger numbers provided a strong H1 performance at Copenhagen Airports (CPH). The growth continued to be driven by a major increase in the number of domestic passengers, and additional transfer and internationally departing passengers. Based on the strong traffic growth CPH has revised its profit forecast for the full year.
The total increase in passenger numbers of 5.7% in H1 2010 would have been higher had Copenhagen Airport not been closed for approximately six days in April due to the Icelandic ash cloud. CPH initiated a number of operational measures to reduce the financial loss including moving essential maintenance to daytime and large parts of the airport completely shut down in order to save electricity and reduce the need for manpower. Without the ash cloud, the growth would have been approximately 9.5%.
The traffic growth was driven by a further strengthening of the routes offered by low-cost carriers out of Copenhagen and by growth on the intercontinental routes, which was due, in part, to the opening of three new long-haul routes from Copenhagen to Doha, New York JFK and Toronto.
Shopping centre revenue decreased, which was due to changes in contract conditions on several speciality stores in the last quarter of 2009 and temporary closing of two food and beverage units. This was partly offset by the increase in passenger numbers and by increasing spend per passenger, which had a positive effect on revenue from the shopping center. Furthermore, new outlets were introduced such as “JOE & THE JUICE” at Nytorv, representing a step forward in the development towards greater product and price differentiation as set out in our 2009 annual report.
On 29 June 2010, CPH re-visited the US Private Placement (USPP) market and successfully completed a note issuance of DKK 1.7 billion equivalent. The Senior Unsecured Notes were issued in three series; USD 100 million due in 2018, USD 147 million due in 2020 and GBP 23 million due in 2020. The proceeds were used to repay existing bank debt and cancel existing bank commitments maturing in March 2012. This has substantially reduced CPH’s re-financing risk and dependency on the bank loan market, and the new debt secures CPH a stable and long-term source of funding on satisfactory terms and conditions.
In H1, CPH signed an agreement to sell its 49% aggregate investment in the Mexican airport company Inversiones y Técnicas Aeroportuarias, S.A. de C.V. (“ITA”) to CPH’s local Mexican partner, Fernando Chico Pardo. The Mexican Competition authorities has approved the purchase agreement, but the divestment is subject to approval of the purchase agreement by the Mexican Ministry of Communications and Transport. The divestment will therefore not be recognised in the financial statements until after regulatory approval, expected in Q3 2010. This is expected to generate a profit before tax of up to DKK 350 million based on the closing rate.
The parking product was re-launched on 28th April with new prices, product groups and an extensive marketing campaign. The initial results of the campaign have been positive particularly in long term leisure parking.
HIGHLIGHTS OF THE FIRST SIX MONTHS OF 2010
Passenger numbers at Copenhagen Airport increased by 5.7% in H1 2010. The number of locally departing passengers increased by 6.7%, and transfer traffic increased by 3.5%
Revenue increased by 12.5% to DKK 1,603.2 million (2009: DKK 1,424.6 million) primarily due to the increase in passenger numbers and an agreement to terminate a long term rent contract with SAS Cargo
EBITDA increased by 18.9% to DKK 864.4 million (2009: DKK 726.8 million). EBITDA totalled DKK 900.4 million excluding one-off items (2009: DKK 755.6 million). H1 2009 was also impacted by restructuring expenses
EBIT increased by 23.2% to DKK 629.6 million (2009: DKK 510.9 million). When excluding one-off items, EBIT amounted to DKK 665.6 million (2009: DKK 539.7 million)
Results of international investments were a profit of DKK 16.2 million, which was an increase of DKK 9.7 million (2009: a profit of DKK 6.5 million)
Net financial costs increased by DKK 41.5 million mainly due to loss on interest rate swaps in connection with the repayment of bank debt and extraordinary amortisation of loan costs in connection with repayment and cancellation of bank facilities in June 2010 due to their replacement by USPP fundings
Profit before tax increased to DKK 480.6 million (2009: DKK 393.7 million). Profit before tax amounted to DKK 516.6 million when excluding one-off items (2009: DKK 422.5 million)
Capital expenditure amounted to DKK 323.9 million in the first six months of 2010 (2009: DKK 237.0 million)
In June 2010, bank facilities of DKK 1,043.0 million and EUR 83.8 million were repaid/cancelled. CPH obtained new fundings of USD 247.0 million and GBP 23.0 million in June with an eight and ten year maturity via a USPP. The new facilities equivalent to DKK 1,704.2 million were provided by a group of USPP investors
The total number of passengers is expected to increase based on the anticipated traffic programme for 2010 and the growth in H1 2010.
Based on the strong traffic performance and despite the impact of the Icelandic ash cloud the final outlook for 2010 is revised. Profit before tax is now expected to be slightly higher than in 2009, when excluding one-off items. The revised outlook is based on a continued recovery in the world economy.
CPH continuously seeks to adapt the investment level to the current economic environment. In accordance with the charges agreement, CPH is committed to invest approximately DKK 500 million in 2010. This will be supplemented by CPH Swift and other commercial investments.