CPH: Passenger growth strengthen the profit

Passenger numbers at Copenhagen Airport grew by 3.2% in the first nine months of 2013 to 18.4 million travellers, resulting in an increase of revenue from both the aeronautical and the non-aeronautical parts of the business. 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 our good Q2 performance is the reason that we can report solid growth for the first nine months of the year. We are investing in strengthening and expanding the airport as the key transport hub of northern Europe. The high level of investments in recent years has facilitated the growth of the business  thereby enable CPH to increase earnings. Quite simply, we must ensure that we can afford to invest in the future," said Thomas Woldbye, CEO of Copenhagen Airports A/S.

Copenhagen Airport completed the refurbishment and expansion 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. We continually work to strengthen this position, and our focus is on developing our intercontinental route network and the feeder traffic to make sure that the long-haul routes are sustainable," said Thomas Woldbye.

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.

"The FAB awards really bear witness to the success of our strategy of raising the bar for the airport's range of cafés and restaurants," said Copenhagen Airport's VP for Sales and Marketing Carsten Nørland in connection with the presentation of the awards.

The three awards were given in recognition of the airport's work to develop the service and range of facilities offered to travellers:

"CPH Nordic Dining is a strong example of how we work to make the passage through the airport an extraordinary experience," said Carsten Nørland.

These efforts are also reflected in revenues from the non-aeronautical segment. 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.

Outlook

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.

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.