Interim report of Copenhagen Airports A/S (CPH) for the three months to 31 March 2016

Stock Exchange Announcement 2016

Copenhagen, 12 May 2016

INTERIM REPORT OF COPENHAGEN AIRPORTS A/S (CPH) FOR THE THREE MONTHS TO 31 MARCH 2016  

The Board of Directors today approved the interim report for the period 1 January – 31 March 2016. 

Summary for the first Three months of 2016  

Copenhagen Airports A/S (CPH) got off to a good start in 2016 as passenger numbers increased by 13.4%. The growing number of passengers lead to increases in both revenue and profit before tax. CPH retains its guidance for the full year. 

The total number of passengers in the first quarter of the year increased by 13.4% year on year to 6,106,197, making this the busiest first quarter in the history of Copenhagen Airport.

The growth in traffic volumes was mainly driven by international traffic. European traffic grew by 14.4%, and intercontinental traffic was up by 11.2%. 

In addition, the Q1 interim financial statements were supported by strong growth in revenue from parking mainly due to an increase in parking customers from Sweden, and reduced costs per passenger. Profit before tax for the quarter, excluding one-off items, was DKK 304.2 million, which was a 24.7% improvement on the first quarter of 2015. 

Strong growth in international traffic

Copenhagen Airport is facing strong competition from other European hub airports in attracting new routes and passengers, and it is therefore important to continually grow intercontinental traffic. A number of intercontinental routes have opened since the first quarter of 2015, and more frequencies have been added and additional capacity deployed on several routes. For example, Emirates added a daily flight between Copenhagen and Dubai using the Airbus A380 in December 2015, and SAS recently opened a scheduled service between Copenhagen and Boston. 

European traffic has mainly been boosted by a number of new routes that have increased the number of leisure and business travellers to Denmark. Especially low-cost carriers easyJet and Ryanair have helped lift the number of inbound passengers. In March, Hungarian-based low-cost carrier Wizz Air started operations between Copenhagen and Skopje and also announced a new route to Sofia scheduled to open in June. 

High level of capital expenditure continued

CPH invested more than DKK 1.1 billion in 2015 and will maintain a very high level of investment in 2016. Expansion of the central security checkpoint and of Terminal 2 was commenced in the first quarter of the year. In addition, a number of aircraft stands and bus facilities were renovated. Capital expenditure in Q1 totalled DKK 165.0 million. 

The expansion of the central security checkpoint will both provide more space for passengers and increase the number of security screening lanes, increasing capacity from the current 18 to a total of 24 lanes. This will help to retain the high level of service and the short waiting times. 

Growth in non-aeronautical activities

Non-aeronautical activities also reported growth, and revenue from this business grew by 8.2%, mainly driven by a 13.4% increase in revenue from parking. Moreover, revenue from the shopping centre grew by 5.6%.  

Highlights of results            

• Passenger numbers at Copenhagen Airport grew by 13.4% in the first three months of 2016. The number of locally-departing passengers grew by 15.4% and the number of transfer passengers grew by 2.8%. 

• Revenue grew by 10.8% to DKK 965.7 million (2015: DKK 871.9 million), mainly driven by the 15.4% increase in locally departing and international passengers and increased revenue from parking. 

• EBITDA, excluding one-off items, increased by 14.1% to DKK 511.7 million (2015: DKK 448.6 million). Reported EBITDA rose 13.9% to DKK 507.3 million (2015: DKK 445.2 million).

• EBIT, excluding one-off items, increased by 19.0% to DKK 348.0 million (2015: DKK 292.4 million).  Reported EBIT rose 18.9% to DKK 343.6 million (2015: DKK 289.0 million). 

• Net financing costs were down by DKK 4.8 million year on year. 

• Profit before tax excluding one-off items was up by 24.8% to DKK 304.2 million (2015: DKK 243.8 million). Reported profit before tax was up by 24.7% to DKK 299.8 million (2015: DKK 240.4 million). 

• Capital expenditure was DKK 165.0 million in the first three months of 2016 (2015: DKK 193.9 million). The first three months of the year were marked by the expansion of capacity at the central security checkpoint, renovation of western landside apron, the development of wide-body bus facilities, renovation of aircraft stands and various maintenance improvement projects.  

Outlook for 2016

The outlook for traffic growth, profit before tax and capital expenditure is unchanged from the announcement

of 1 March 2016. 

Forecast of profit before tax

Based on the expected traffic programme for 2016, an increase in the total number of passengers is expected. Developments in passenger numbers is a dynamic factor that is subject to both positive and negative influence from general economic developments, decisions by airlines relating to routes and capacity as well as isolated events in the airline industry. The increase in passenger numbers is expected to have a favourable impact on revenue. Operating costs are expected to be higher than in 2015, primarily due to the expected rise in passenger numbers, stricter requirements for security and cost inflation, but this will be partly offset by a continuing focus on operating cost efficiencies. 

Overall, depreciation charges and financial costs are expected to be in line with 2015, primarily as a result of a continued high investment level, partly offset by lower borrowing costs. 

Profit before tax for 2016 is expected to be in the range of DKK 1,450-1,550 million, excluding one-off items. EBITDA is projected to be higher in 2016 than in 2015, excluding one-off items. 

Forecast of capital investment

CPH expects to continue to invest in growth for the benefit of passengers and airlines. As in recent years, CPH expects capital investments to remain at a high level in 2016. Planned investments include two additional security lanes at the central security check, the expansion of passport control in Pier C with self-service passport control for EU citizens, Pier C bus gates, an upgrade of the baggage reclaim area, and a redesigned passenger drop-off zone in P4. CPH will also be investing in non-aeronautical projects for the benefit of airlines and passengers.