Fraport AG Q2 2024 Earnings: Record High EBITDA and Revenue Growth

Mark Eisenberg
Photo: Finoracle.net

Company Performance Highlights

EBITDA: €576 million, a record high, 18% higher than the previous year.

Group Revenues: Increased by 13% to over €2 billion in H1 2024.

Net Debt to EBITDA: Improved to 6.4 times.

Full-Year Guidance: Maintained, expecting to meet the lower half of traffic forecast and the midpoint of financial targets.

Key Takeaways

Recovery Rate: 85.5% in the first half of 2024 compared to 2019 levels.

Group Revenues: Up by 13% to over €2 billion.

Net Income: Nearly doubled from the previous year.

Porto Alegre Airport: Operations to restore from October onwards.

Company Outlook

Traffic Guidance: Lower half of the expected range for Frankfurt Airport passengers.

Financial Expectations: Midpoint for group EBITDA and group result.

Net Debt to EBITDA: Expected to remain stable.

Bearish Elements

Shopping and Service Revenues: Flat compared to 2019 levels.

Porto Alegre Airport: Closed due to flooding, resulting in revenue and EBITDA loss.

Bullish Elements

International Portfolio: Surpassing 2019 benchmarks.

Advertising Revenues: Catching up to 2019 levels.

Retail Revenues: On par with 2019, exceeding the previous year's second quarter by 3%.

Q&A Highlights

CFO Zieschang: Expects A320neo engines back and some Dreamliners delivered by 2025.

Lufthansa's Acquisition of Alitalia: Not expected to change traffic patterns.

Growth in International Portfolio: Solid fee increases and traffic growth contributing to 2025 EBITDA.

Dividends: Will be paid once free cash flow is consistently positive.

Financial Performance

EBITDA: €355 million in Q2 2024, roughly 10% above the previous year and 14% higher than 2019.

Operating Cash Flow: €359 million, sufficient for positive free cash flow in H1 without expansion CapEx.

Net Debt: Increased to €8.2 billion at the end of H1.

International Operations

Fraport Greece and Antalya: Continued strong performance.

Lima Airport: Encouraging development, exceeding 2019 levels.

Porto Alegre: Expected €100 million for restoration, blend of insurance coverage and local authority rebalancing.

Segment Analysis

Aviation: Revenues exceeded 2019 levels, driven by traffic recovery and higher airport charges.

Retail and Real Estate: Revenues and EBITDA above 2019 levels, with spend per passenger expected to outperform previous years.

Ground Handling: Improved cost coverage from higher passenger numbers expected.

International Activities: Strong performance despite challenges at Porto Alegre Airport.

Future Guidance

2024 Guidance: Specified within the initial ranges.

Traffic Forecast: Lower half of the guidance range for Frankfurt.

Financial Targets: Midpoint for group EBITDA and group result.

Operational Adjustments

Project Investments: Terminal 3 in Frankfurt and new midfield terminal in Lima.

CapEx Management: Focus on productivity and cost control, especially in ground handling.

In summary, Fraport AG has demonstrated a robust financial performance amidst challenges, maintaining a strategic outlook for continued recovery and growth, particularly in its international portfolio. The management remains focused on achieving its financial targets and efficiently managing operations.

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Mark Eisenberg is a financial analyst and writer with over 15 years of experience in the finance industry. A graduate of the Wharton School of the University of Pennsylvania, Mark specializes in investment strategies, market analysis, and personal finance. His work has been featured in prominent publications like The Wall Street Journal, Bloomberg, and Forbes. Mark’s articles are known for their in-depth research, clear presentation, and actionable insights, making them highly valuable to readers seeking reliable financial advice. He stays updated on the latest trends and developments in the financial sector, regularly attending industry conferences and seminars. With a reputation for expertise, authoritativeness, and trustworthiness, Mark Eisenberg continues to contribute high-quality content that helps individuals and businesses make informed financial decisions.​⬤