The airport operator Fraport posted a sharp drop in revenue during the first half of 2020, with a clearly negative Group result. The operating performance, which already slowed down in the first quarter of the year, weakened further during the second quarter, in line with expectations. Frankfurt Airport's passenger traffic plummeted by 94.4% year-on-year in the April-to-June 2020 period, while falling by a total of 63.8% during the entire first half. Also at Fraport's Group airports worldwide, passenger traffic came to a virtual standstill in the second quarter.
In the first half of 2020, Group revenue was down by 48.9% to €910.6 million year-on-year. Adjusting for revenue from construction relating to capacitive capital expenditure at Fraport's subsidiaries worldwide (based on IFRIC 12), Group revenue decreased by 47.6% to €720.4 million. Group EBITDA declined by 95.6% to €22.6 million, while Group EBIT fell to minus €210.2 million (first half 2019: €279.1 million). With minus €308.9 million, the Group EBT also moved noticeably into negative territory (first half 2019: €214.8 million). The Group result (net profit) dropped to minus €231.4 million year-on-year (first half 2019: €164.9 million). With the exception of the Lima subsidiary, all of Fraport's international airport subsidiaries also made negative contributions to the Group's financial performance.
Fraport responded to the COVID-19 crisis quickly by reducing costs and introducing short-time work. In the second quarter of 2020, more than 16,000 of the approximately 22,000 employees of the Fraport Group companies in Frankfurt were working short-time. On average, working hours were reduced by around 60% across the entire workforce.
Dr. Stefan Schulte Fraport AG's executive board chairman said: “We responded quickly and comprehensively to the crisis and were thus able to lower costs with immediate effect. But this will not be enough in the medium term. Even in 2022/2023, we still expect passenger volumes at Frankfurt Airport to be around 15 to 20% below the high of 2019. We must therefore streamline and downsize our company to make it even more efficient.”
The plan is to shed around 3,000 to 4,000 of the approximately 22,000 jobs across Fraport's Group companies in Frankfurt. In addition to natural job turnover and largely forgoing new hires, various socially responsible measures are currently being negotiated between management and employee representatives. The extent to which compulsory redundancies will be required will depend primarily on the implementation of these measures.
Fraport raised about €1.3 billion in additional financing in the first half of the year. In July, the Group issued a corporate bond, further increasing liquidity by some €800 million. This means that the company currently has nearly €3 billion in cash and committed credit lines. As a result, liquidity is secured until at least the end of 2021.
