CPH: A good start to 2014
Copenhagen Airports A/S (CPH) had a good start to 2014 with a 4.3% increase in passenger numbers. The growing number of passengers led to an increase in both revenue and profit before tax. CPH retains its guidance for the full year.
Passenger numbers at Copenhagen Airport increased by 4.3% year on year to 5,290,484 in the first three months of 2014. The rise in passenger numbers led to a 5.7% increase in revenue to DKK 831.9 million, while profit before tax increased by 5.8% to DKK 266.6 million.
The increase in passenger numbers was mainly due to the full-year effect of the many new routes opened in 2013.
We are satisfied with the growth in traffic in the first quarter of the year, and low-cost carriers Norwegian and easyJet especially achieved strong growth rates in the first months of the year. Moreover, Norwegian's three new intercontinental routes and the full-year effect of the SAS route to San Francisco continued to generate growth in the strategically important intercontinental routes. Those routes help strengthen our position as a hub," said Thomas Woldbye, CEO of Copenhagen Airports A/S.
CPH is continuing its high level of capital investment in strengthening and expanding Copenhagen Airport. In recent years, CPH's capital investment has been in the order of DKK 1 billion, and because of the continuing growth in the number of intercontinental routes, expansion will now be started on Pier C, the pier used for intercontinental and non-Schengen traffic. Moreover, CPH continues to analyse how additional expansion can be implemented efficiently in the coming years.
As a result of the increase in passenger numbers, revenue from the non-aeronautical segment also increased, which includes revenue from the shopping centre, the hotel and parking. The duty- and tax-free stores were refurbished in the first quarter of last year, and the full-year effect of this project plus the rise in passenger numbers had a positive impact on revenue from the shopping centre, which was up by 2.7%. Revenue from the hotel operation increased by 3.9%, and parking revenue was up by 4.3%.
Several international awards
Copenhagen Airport received several international awards in the first quarter. For the second consecutive year, the security service at Copenhagen Airport was rated the world's best. The award was presented in late March based on the worldwide Skytrax survey of airline passenger satisfaction in which 12.8 million passengers rated 410 airports worldwide.
Obviously, our priority is to maintain the highest level of security, and our ambition is also to offer a high level of service by meeting passengers at eye level. For this reason I am very proud that our employees have been awarded this recognition for the world's best security processing,” said Thomas Woldbye.
In addition Copenhagen Airport again won the Skytrax title as "Best Airport in Northern Europe", and in early April, Copenhagen Airport won the European championship in route development at the annual "Routes Europe" route development conference, in close competition with a number of Europe's leading airports. The jury consisted of representatives of a number of airlines.
Last but not least, Copenhagen Airport is among the world's best on social media. This was recently established when Copenhagen Airport won two digital and social media Moodies Awards: the prestigious "best Facebook page" award, coming in second in the category "Best use of social and digital media".
The awards were given in recognition of CPH's high level of service, the airport's efficiency and CPH's high level of investment in connection with its World Class Hub strategy.
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 a continuing focus on operating cost efficiencies.
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.
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 CPH is 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 non-aeronautical projects for the benefit of airlines and passengers.