Flughafen Wien AG

Earnings Release • Mar 23, 2006

News Details

Corporate | 23 March 2006 10:00

Flughafen Wien AG: Increase of 3.6% in net profit for 2005

Corporate-news transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— The publicly traded Flughafen Wien AG also recorded good results for 2005, which represent a further improvement over the sound prior year. Turnover totalled € 410,3 million (+3.0%) for the reporting year and net profit rose 3.6% to € 74.3 million. EBITDA declined 1.2% to € 149.7 million and, as the result of depreciation, earnings before income and taxes (EBIT) fell 10.0% to € 92.3 million. These results were announced today by Herbert Kaufmann, member and speaker of the Management Board of Flughafen Wien AG, at a press conference in Vienna. The development of business in 2005 was supported by an upward trend in all traffic segments. The number of passengers rose 7.3% to 15.9 million, whereby the role of the low-cost carriers as a driver for growth is becoming more important each year. Their share of total passenger volume rose from 11.1% in 2004 to 12.4% for 2005. These airlines now generate more than 30% of all new traffic at Vienna International Airport. Strong increases were also recorded in travel to Eastern Europe (+ 9.9%), the Far East (+12.9%) and Middle East (+34.0%) as well as in transfers. These developments further strengthened the hub function of Vienna International Airport. Cargo volume also showed good development because of the increased frequency of “cargo only” flights: 234,677 tonnes of cargo represented a plus of 12%. 2005 2004 Change in € mill. in € mill. in % Turnover Group 410.3 398.3 +3.0 Airport 188.6 190.5 -1.0 Handling 132.2 123.6 +6.9 Non-Aviation 89.2 83.9 +6.3 Operating income 433.5 418.8 +3.5 Operating expenses 341.2 316.2 +7.9 EBITDA 149.7 151.4 -1.2 Income before interest and taxes (EBIT) Group 92.3 102.5 -10.0 Airport 66.7 77.8 -14.2 Handling 15.5 18.0 -13.8 Non-Aviation 34.5 30.3 +13.6 Profit before tax(EBT) 100.0 105.4 -5.1 Net profit for the year 74.3 71.7 +3.6 Cash flow from operating activities 158.0 194.4 -18.7 Passengers (in mill.) 15.9 14.8 +7.3 Transfer passengers 5.4 5.1 +6.9 (in mill.) Flight movements 230,900 224,809 +2.7 Maximum take-off weight 6.5 6.2 +4.6 in mill. to) Cargo (in 1000 tonnes) 234.7 209.6 +12.0 Results in Detail The Flughafen Wien Group recorded a 3.0% increase in turnover to € 410.3 million for 2005 as the result of excellent growth in traffic. Although the Airport Segment reported a 1.0% decline in turnover to € 188.6 million, it remained the largest business unit with a 46.0% (2004: 47.8%) share of total turnover. This slight decrease in turnover, which is generated primarily from landing, passenger and infrastructure tariffs, is a direct result of price and incentive policies that are designed to safeguard the competitive position of Vienna International Airport. This attractive tariff policy and the high quality of services led to an increase of 26 destinations and eight new airlines during the reporting year. The Handling Segment was able to increase its share of Group turnover to 32.2% in 2005. Higher revenues were recorded in the apron handling (+5.7%), cargo handling (+12.5%) and general aviation business units (+24.5%). Segment turnover rose by 6.9% to € 132.2 million, with the strongest increases recorded by the low-cost carriers. Turnover with the Austrian Airline Group rose by 2.2%. The volume of aircraft handling services rose by 2.2%, while cargo handling showed a plus of 12.0%. The average market share of the Handling Segment remained nearly constant, totalling 90.6% for 2005 versus 91.0% in the prior year. The Non-Aviation Segment reported an increase of 6.3% in turnover to € 89.2 million for the reporting year, which represented 21.7% of revenues for the Flughafen Wien Group in 2005. The most important growth drivers were parking with a plus of 16.8%, gastronomy with 10.7%, shopping with 8.9% and infrastructure supply and disposal services with 15.1%. Primary turnover recorded by the shops and gastronomy facilities increased by 9.0% in 2005. In contrast, revenues from the provision of security services declined 11.9% following the new tender by the Republic of Austria that took effect on 1 January 2005. Earnings An overview of earnings recorded by the Flughafen Wien Group for the 2005 Business Year shows: operating income +3.5% to € 433.5 million, operating expenses +7.9% to € 341.2 million, earnings before interest and taxes (EBIT) -10.0% to € 92.3 million, financial results +€ 4.8 million to € 7.7 million, earnings before taxes (EBT) -5.1% to € 100,0 million, net profit for the year +4.2% to € 74.7 million and the share of net profit due to Flughafen Wien AG +€ 2.6 million to € 74.3 million. Earnings before interest and taxes (EBIT) fell 10.0% to total € 92.3 million for 2005. The Airport Segment generated the largest share of Group EBIT with € 66.7 million, followed by the Non-Aviation Segment with € 34.5 million and the Handling Segment with € 15.5 million. The decline in earnings reported by the Airport and Handling Segments was triggered by an increase in turnover that remained below the growth in traffic as well as higher costs, above all depreciation, that were linked to the increase in the volume of business. Cost reduction measures implemented by the Company were unable to completely offset this development. The Non-Aviation Segment recorded an improvement in earnings as the result of higher revenues from parking, shopping and gastronomy. Personnel expenses rose by 8.6% to € 184.6 million as a result of wage and salary increases mandated by collective bargaining agreements and growth in the workforce. The increase of 9.7% in the number of employees to 3,581 for the reporting year was a function of the development of traffic as well as the expansion of security controls on 1 January 2006 to also include employees working in sensitive areas of Vienna International Airport. Other operating expenses decreased 10.5% to € 63.4 million, primarily due to a reduction of € 7.3 million in maintenance cots from the unusually high prior year level to € 14.2 million for 2005. Financial results for 2005 show an increase of € 4.8 million to € 7.7 million. This improvement resulted primarily from a third quarter write-up of € 5.7 million to a loan that was previously written off by the Company and a reversal of € 5.3 million to the revaluation reserve following the sale of fund investments in the prior year. Financing costs showed a contrary development: the high level of investment led to a reduction of € 49.8 million in cash and cash equivalents and short-term borrowings increased by € 170.7 million. Results from companies consolidated at equity amounted to € +0.9 million. Of this total, € -0.6 million is related to the stake held in the City Airport Train and € +1.5 million to the investment owned in Malta Airport. The earnings generated by these two investments for 2005 represent an improvement of € 1.2 million over the prior year. Earnings before taxes (EBT) declined 5.1% to € 100.0 million. The reduction in the Austrian corporate tax rate from 34% to 25% as of 1 January 2005 and lower earnings before taxes resulted in a decrease of 25.0% in income taxes to € 25.3 million. The tax rate for 2005 totalled 25.3%, which represents a substantial decrease below the prior year level of 32.0%. Net profit for the reporting year increased 4.2% to € 74.7 million. Of this amount, € 0.4 million is attributable to minority shareholders and € 74.3 million to Flughafen Wien AG as the parent company. Earnings per share rose from € 3.41 in the prior year to € 3.54 for 2005. Dividend The 2005 Business Year closed with distributable profit of € 42,005,514.69. The Management Board of Flughafen Wien AG recommends payment of a dividend € 2.00 per share, for a total distribution of € 42,000,000.–, and the carry-forward of the remaining € 5,514.69. Cash Flow The analysis of cash flow in the Flughafen Wien Group shows that investment projects totalling € 343.1 million in 2005 were financed by relatively equal components of cash flow from operating activities and debt. The total increase in liabilities and provisions combined with a slight decline in EBITDA and higher income tax payments led to an 18.7% decrease in net cash flow from operating activities to € +158.0 million (2004: € +194.4 mill.). Corporate Spending Investments in tangible, intangible and financial assets totalled € 343.1 million for 2005, which represents an increase of 84.2% over the prior year. The major investment of the year from a visual standpoint was the air traffic control tower, which is rented largely to Austro Control GmbH and used to a lesser extent by the airport’s movement control unit. Other investment highlights were the construction of the Air Cargo Center, the construction and opening of the Handling Center West, the expansion of the existing baggage handling facilities and completion of additional apron areas. The VIP and General Aviation Center in the western sector of Vienna International Airport was completed just in time before Austria assumed the rotating presidency of the European Union in January 2006. The addition of a storey to car park 3 and the construction of car parks 7 (east) and 8 (west) increased parking capacity. The newly constructed Terminal 1A opened to handle check-in procedures for the low-cost carriers. The environmental impact review for the planned third runway was started during the reporting year. Obligations defined by the mediation contract in connection with the construction of this runway are included under investments as additions for 2005. The most important financial investment was the acquisition of approximately 8% of the shares in Malta Airport plc. Outlook The Austrian economic research institute (WIFO) predicts real growth of 2.4% for 2006 and 2.0% for 2007. The management of Flughafen Wien AG expects this development will have a positive effect on traffic at Vienna International Airport. Further impulses should also come from continued economic recovery in the new EU member states that are included in Vienna’s catchment area. Assuming economic conditions remain stable, Flughafen Wien AG expects an increase of roughly 6% in the number of passengers, 2% in flight movements and 3% in maximum take-off weight for 2006. A multi-stage, flexible expansion concept allows for the adjustment of Vienna’s long-term expansion plans to match this development with the growth in passenger volume. Investments totalling € 533 million are planned for Airport and Non-Aviation projects from 2006 to 2010. Of this total, € 208 million is designated for the scheduled realisation of projects in 2006. The major projects for the coming year include the VIE Skylink Terminal (€ 121 mill.), baggage sorting equipment (€ 11 mill.), phase 2 of the Office Park (€ 21 mill.) and the expansion of the aprons (€ 26 mill.). Subsequent Events The parties to the contract – the Slovakian National Property Fund, the Slovakian Ministry of Transportation and the TwoOne Consortium – signed a share purchase and shareholder agreement for the 66% privatisation of Bratislava und Kosice Airports on 10 February 2006. Flughafen Wien AG holds a 50.1% stake in the TwoOne Consortium. The good development of traffic continued from 2005 into the first months of 2006 across all traffic segments. The number of passengers handled during January and February 2006 rose 9.9% to 2,124,113, while transfers increased 14.5%. Maximum take-off weight (MTOW) grew 4.5%, flight movements showed a plus of 3.5% and cargo volume was 20.4% higher. Robert Dusek, Investor Relations (+43-1-) 7007-23126 (c)DGAP 23.03.2006 ————————————————————————— language: English emitter: Flughafen Wien AG Postfach 1 1300 Wien-Flughafen Österreich phone: +43-1-7007/23126 fax: +43-1-7007/23058 email: r.dusek@viennaairport.com WWW: www.viennaairport.com ISIN: AT0000911805 WKN: 091180 indexes: ATX stockmarkets: Amtlicher Markt in Wiener Börse; Freiverkehr in Berlin-Bremen, Hamburg, München, Stuttgart; Open Market in Frankfurt; Foreign Exchange(s) London End of News DGAP News-Service —————————————————————————