Fraport Sees Lower Ground Handling Profit

May 9, 2012

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Fraport, the operator of Frankfurt airport, said operating profit at its ground handling segment could fall in 2012 due to a higher than expected pay deal and turbulent freight markets.

Fraport said it did not see any changes, however, to the overall outlook it gave in its annual report in March, when it said it expected revenue of over EUR€2.5 billion (USD$3.25 billion) and an increase in operating profit of at least 5 percent in 2012.

It also sees revenues, operating profit and Frankfurt passenger numbers rising in 2013 from 2012, according to a presentation accompanying first-quarter results on Wednesday.

First-quarter earnings before EBITDA rose 7.6 percent to EUR€138.3 million. It added in the presentation that passenger numbers at Frankfurt airport rose 2.8 percent in April.

After years of wage restraint in Germany have boosted its competitiveness, it was announced at the end of March that two million German public-sector workers will get a pay rise of 6.3 percent over a 24 month period.

Meanwhile, freight volumes at Frankfurt have been hurt by a night flight ban imposed at the end of October, with volumes down 11.7 percent in the first three months of the year.

The ground-handling segment accounted for EUR€54.5 million of Fraport's total EBITDA of EUR€802.3 million in 2011.

(Reuters)