CPH: Strong year with passenger record
Copenhagen Airports A/S (CPH) set a passenger record for the third consecutive year with 24.1 million travellers, resulting in growing revenue and a higher profit excluding one-off items. The growth was driven by more international passengers, higher parking revenue and growth in the hotel operation. CPH expects passenger numbers to continue to grow in 2014.
The total number of passengers at Copenhagen Airport grew 3.1% to 24.1 million in 2013, which was a passenger record for the third consecutive year. Revenue increased by 3.7% to DKK 3,644.5 million.
In 2012, CPH sold its interest in UK-based airport company NIAL, which had an extraordinary impact on profit for the year. As a result, reported profit before tax for 2013 was down from fra DKK 1,915.3 million to DKK 1,171.8 million. However, profit before tax excluding one-off items rose to DKK 1,184.2 million from DKK 1,166.3 million.
The continuing growth clearly demonstrates that CPH's World Class Hub strategy is effective:
"In recent years, we have seen an increase in the number of international and intercontinental passengers we serve, which is in line with our strategic focus on strengthening our position as a northern European hub. That is also the reason why, each year, we invest a significant amount in expanding the airport so it is ready to handle the growth we expect over the next few years," said Thomas Woldbye, CEO of Copenhagen Airports A/S.
The percentage of international passengers increased from 91.7% to 92.1% of traffic, and intercontinental traffic (long haul) was up by 3.8% and continued to account for 10.2% of traffic. Aeronautical revenue was up by 7.2% to DKK 2,070.9 million, which was mainly due to the increase in passenger numbers and a higher share of locally departing international passengers.
An expanding airport
In order to accommodate the continuing growth, CPH in January 2014 announced its ambitious expansion plans called Expanding CPH, which are the result of 18 months of analysis. The growth vision is to prepare Copenhagen Airport to handle up to 40 million passengers annually, almost twice the current number.
”Expanding CPH” is our vision for expanding the airport, and it is not only that a bigger airport will be better for the region, it's actually a necessity if we want to ensure that Copenhagen Airport will continue to be the strongest hub in northern Europe, also in the future," said Thomas Woldbye.
Good year for parking and hotel operation
Non-aeronautical revenue rose 0.5%, partly driven by a 7.7% increase in revenue from the hotel operation and a 2.8% increase in parking revenue. The shopping centre saw a minor downturn due to the refurbishment of the duty- and tax-free shops in the first half of 2013. Excluding duty- and tax-free sales, revenue grew by 13.4%, mainly driven by strong sales growth in the specialty shops, restaurants and bars following an upgrade of the shop offering.
Recent years' investment in enhancing the travel experience led to international recognition. When the prestigious FAB Awards were presented in Dubai, Copenhagen Airport won the awards for "best airport coffee shop" and "best airport chef-led dining" as well as the award for the world's strongest airport event for the CPH Nordic Dining pop-up restaurant. Copenhagen Airport also received a number of other awards in 2013: for the "world's best security processing”, for being "the most efficient airport in Europe" and for being "the world's best airport at route development" in the 20-to-50-million-passenger category.
Outlook
With the anticipated traffic programme for 2014, we expect to see an increase in the total number of passengers. A positive full-year effect in 2014 is expected from the many new routes opened in 2013. Traffic in 2014 could, however, 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 favourable impact on revenue. Operating costs are expected to be higher than in 2013, primarily due to the expected rise in passenger numbers and cost inflation, but this will partly be offset by our continuing focus on operating cost efficiencies.
Under the charges agreement, CPH must invest an average of DKK 500 million annually but, as in previous years, CPH expects to invest at a level significantly higher in 2014 than what we are committed to under the charges agreement. However, the investment level depends on the continuing increase in total passenger numbers. CPH will also be investing in other commercial projects for the benefit of airlines and passengers.
Depreciation charges and financial costs are expected to be higher in 2014 than in 2013 as a result of the continuing high investment level. Overall, profit before tax for 2014 is expected to be in the range of DKK 1,100.0 million to DKK 1,200.0, million, when excluding one-off items. Operating profit before depreciation is projected to be higher in 2014 than in 2013, when excluding one-off items.