Interim report of Copenhagen Airports A/S (CPH) for the nine months to 30 September 2013
Stock Exchange Announcement number 8/2013
Copenhagen, 5 November 2013
The Board of Directors today approved the interim report for the period 1 January – 30 September 2013.
Summary for the first nine months of 2013
Copenhagen Airports A/S (CPH) recorded passenger growth of 3.2% in the first nine months of the year, resulting in an increase of revenue from both the aeronautical and the non-aeronautical parts of the business. International traffic continues to drive growth, highlighting the effectiveness of Copenhagen Airport's World Class Hub strategy. Both revenue and profit before tax increased, with CPH expecting profit before tax for 2013 to be in line with 2012, excluding one-off items.
In the first nine months of the year, passenger numbers at Copenhagen Airport increased to 18.4 million. Revenue grew by 3.8%, while profit before tax grew by 1.7% to DKK 933.8 million. In Q3 alone, Copenhagen Airport served more than 6.9 million travellers, which represents a 5.0% year-on-year increase.
The busiest summer in the history of Copenhagen Airport and good Q2 performance is the reason that Copenhagen Airport can report solid growth for the first nine months of the year. CPH is investing in strengthening and expanding the airport as Northern Europe's main transport hub. The high level of investments in recent years has facilitated the growth of the business thereby enabling CPH to increase earnings.
Copenhagen Airport completed the refurbishment and expansion of Terminal 2 before the start of the summer season, which created more space for passengers and increased the number of check-in desks and kiosks. At the same time, CPH finished expanding and future-proofing the baggage handling system, so it now has the capacity to serve up to 30 million passengers per year. Copenhagen Airport is currently completing a number of aeronautical investments such as the development of new aircraft stands and replacement of a number of jet bridges.
Traffic performance
At this year's World Routes route development conference in Las Vegas, Copenhagen Airport was named the world's best airport for route development among airports with 20 to 50 million passengers annually. This prestigious award was given in recognition of many years of focused and trustful collaboration between CPH and the airlines on opening routes into and out of Denmark. It is this collaboration that has driven the large number of new international routes that have been opened out of Copenhagen in the past year, and which has generated growth in traffic into and out of the region. The number of international passengers rose 3.7% in the first nine months of the year, while transfer traffic grew by 0.8%. Domestic traffic was down by 2.2% in the first nine months of the year.
International and intercontinental traffic continued to drive growth, clearly reflecting Copenhagen Airport's position as the region's leading international transport hub. CPH continually works to strengthen this position, and its focus is on developing the intercontinental route network and the feeder traffic to make sure that the long-haul routes are sustainable.
Non-aeronautical activities
Copenhagen Airport's targeted efforts and strong results in the non-aeronautical segment won it a number of awards. When the prestigious Airport Food & Beverage (FAB) Awards were presented in Dubai on 2 October, Copenhagen Airport was the proud winner of three awards: Joe & The Juice and Le Sommelier Bar & Bistro put Copenhagen on the world map with awards for 'Best Airport Coffee Shop' and 'Best Airport Chef-Led Dining'. Copenhagen Airport also won the 'Best Food & Beverage Marketing & Promotions Campaign' for the CPH Nordic Dining pop-up restaurant.
Revenue from the shopping centre, parking and hotel operation increased by 0.8%. The many new restaurants, cafés, bars and specialty shops Copenhagen Airport has established in the shopping centre have had a positive effect; and revenues from the hotel operation and parking also grew year on year. The hotel operation especially benefited from increased meeting and conference activities and a higher occupancy rate. This was partly offset by the effect of the refurbishment of the duty- and tax-free shops in the first half of the year.
Highlights of results
- Passenger numbers at Copenhagen Airport increased by 3.2% during the first nine months of 2013. The number of locally departing passengers increased by 3.8%, and transfer traffic increased by 0.8%
- Revenue increased by 3.8% to DKK 2,749.8 million (2012: DKK 2,650.4 million) primarily due to the index adjustment of passenger-related charges in April 2013, more international passengers and increased revenue from parking and increased hotel operation
- When excluding one-off items, EBITDA grew by 4.3%. Reported EBITDA increased by 4.3% to DKK 1,527.7 million (2012: DKK 1,464.6 million)
- When excluding one-off items, EBIT increased by 1.8% to DKK 1,092.1 million (2012: DKK 1,073.3 million). Reported EBIT increased by 1.8% to DKK 1,085.4 million (2012: DKK 1,066.4 million)
- Net financing costs were in line with 2012 and amounted to DKK 151.6 million
- Profit before tax amounted to DKK 940.5 million, when excluding one-off items (2012: DKK 925.3 million). Reported profit before tax increased to DKK 933.8 million (2012: DKK 918.4 million)
- Capital expenditure amounted to DKK 653.0 million in the first nine months of 2013 (2012: DKK 627.2 million)
Outlook for 2013
Forecast of profit before tax
With the anticipated traffic programme for the rest of 2013, we still expect to see an increase in the total number of passengers.
A positive full-year effect in 2013 is expected due to the many new routes opened in 2012, including the full-year effect of the routes restored after the bankruptcy of Cimber Sterling in 2012. Traffic in Q4 2013 could, however, still be adversely affected by continuing financial uncertainty in the Eurozone and by any closure of routes due to airline cutbacks.
The increase in passenger numbers is expected to have a favorable impact on revenue. Operating costs are expected to be higher than in 2012, primarily due to the expected increase in passenger numbers and cost inflation. This will partly be offset by the continuing focus on operating cost efficiencies. Depreciation charges and financial costs are expected to be higher in 2013 than in 2012 as a result of the continuing high investment level. Operating profit before depreciation is still projected to be higher in 2013 than in 2012, when excluding one-off items.
Based on the successful refinancing which has been completed in Q3 2013, CPH revises the profit before tax outlook for 2013 to be in line with 2012, when excluding one-off items.
Forecast of investments in intangible assets and property, plant and equipment
Under the charges agreement, CPH must invest an average of DKK 500 million annually in aeronautical projects but, as in previous years, CPH expects to invest at a level significantly higher than that in 2013. CPH will also be investing in other commercial projects for the benefit of airlines and passengers.
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