Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fraport AG (FPRUF, Financial) reported a revenue growth of over 10% in Q3 2024, with contributions equally from international operations and Frankfurt.
- The company's EBITDA increased by about 10% year-to-date, aligning with full-year expectations.
- International operations, particularly in Greece and Lima, showed strong performance, contributing significantly to the group's financial results.
- The Terminal 3 project at Frankfurt Airport is progressing well, with approvals in place and expected operational readiness by 2026.
- Fraport AG (FPRUF) is seeing positive developments in its international portfolio, with Lima and Antalya airports preparing for new infrastructure openings.
Negative Points
- Passenger recovery at Frankfurt Airport is lagging behind other European hubs, with geopolitical issues and aircraft shortages impacting growth.
- The German aviation tax increase is creating a competitive disadvantage for Frankfurt Airport compared to other European airports.
- The ground handling segment continues to face financial challenges, with a negative EBITDA expected for the full year.
- High wage inflation and increased operational costs are impacting the company's financial performance.
- The temporary closure of Porto Alegre Airport has negatively affected the group's financial results, though compensations are expected.
Q & A Highlights
Q: Can you provide an update on the expected increase in tariffs and your traffic expectations for 2025?
A: We anticipate a tariff increase between 5% and 9.5%, but not at the upper end. Discussions are ongoing, and we hope to provide an update in the next 4 to 5 weeks. For 2025, we expect traffic growth, but it will be modest due to factors like the German aviation tax and aircraft capacity issues at Lufthansa.
Q: Regarding the reduction of minorities in your international portfolio, how much are you willing to invest, and what are your priorities?
A: We are focusing on reducing minorities by selling stakes, such as in Delhi Airport, and expect proceeds from these sales. We are interested in acquiring a minority stake in Kalamata Airport, Greece, but it will be a small investment.
Q: Can you explain the cost increase this quarter and your expectations for Q4 and 2025?
A: The cost increase is mainly due to higher wages from collective bargaining agreements. We expect wage inflation to be lower next year, around 5%, compared to the 9-10% this year. Material expenses have normalized, and we don't anticipate significant price impacts.
Q: What is the rationale behind selling your stake in Delhi Airport, and does this signal a shift away from investments in India?
A: The sale of our stake in Delhi Airport is part of our strategy to streamline our portfolio and focus on reducing net debt. It was more of a financial investment over time. We remain interested in the Indian market for future opportunities.
Q: How do you view the potential for a multi-year tariff agreement, and what are the benefits?
A: A multi-year tariff agreement provides stability and allows us to plan for traffic and cost developments. While we don't have to pursue it, if the outcome is favorable, we would prefer a multi-year agreement. Discussions are progressing well, and we hope to update you soon.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
