CPH: Strong H1 performance

2012-08-14 — /travelprnews.com/ — Passenger numbers rose by 4.2% despite the bankruptcy of CPH’s third largest customer and challenging market conditions. The number of transfer passengers at Copenhagen Airports continued to increase, supporting CPH’s strategy of strengthening its position as the preferred Northern European transport hub. CPH retains its overall full-year forecast regardless of the bankruptcy of Cimber Sterling in May 2012.

Passenger numbers at Copenhagen Airport were up by 4.2% in the first six months of 2012 to 11.3 million passengers, contributing to a 6.1% increase in revenue for the period. Profit before tax increased by 22.3% to DKK 533.9 million, primarily due to higher traffic revenue and growing sales at the shopping centre as well as lower financing costs, partly offset by the effect of the loss caused by the above mentioned bankruptcy.

“Thanks partly to the strong efforts made by CPH relating to route development, a number of airlines have announced new routes and frequencies in the period since the Cimber Sterling bankruptcy. CPH has already regained 81% of the seat capacity we lost in connection with the bankruptcy; part of this new capacity will not be added until later in the year. CPH had minimised its risk of loss on outstanding receivables and therefore only suffered an immaterial direct loss on the Cimber Sterling bankruptcy,” said Thomas Woldbye, CEO of Copenhagen Airports A/S.

The number of transfer passengers at Copenhagen Airport rose in H1 2012. The increase was primarily driven by increased transfer traffic from Norway, Poland, Germany, the Baltic States and Finland, which supports CPH’s World Class Hub strategy.

Aeronautical revenue rose by 6.1% in H1 2012, thanks to increased traffic revenue generated by the rising traffic volume and adjustment of charges under the long-term charges agreement which CPH signed with the airlines in 2009.

Continued growth at the shopping centre
Sales at Copenhagen Airport’s shopping centre rose by 13.0% due to higher spend per passenger and the full-year effect of the full occupancy of all space at the shopping centre. At the end of Q2, CPH signed a five-year agreement with Gebr. Heinemann to continue to operate the duty- and tax-free shops at Copenhagen Airport. Two new food & beverage units were also opened in Q2: a MASH steakhouse in Terminal 2 and a Foodmarket deli in Terminal 1 and Terminal 2.

“The new contracts will contribute to creating travel experiences in line with our customers expectations and to ensure that we continue to develop the shopping centre in order to retain Copenhagen Airport’s top rankings in the retail field,” said Thomas Woldbye.

Major expansion projects
In H1, CPH signed a contract with Siemens for a major expansion and upgrade of Copenhagen Airport’s baggage system. The project will prepare the baggage system for the future passenger flows through a capacity expansion that will enable Copenhagen Airport to handle up to 30 million passengers and will further enhance the operational reliability of the system. The project is scheduled for completion by the summer of 2013 and is part of the new strategy under which CPH is making major investments to develop Copenhagen Airport into the future.

CPH has concurrently started a major project to renovate and expand Terminal 2 and the Arcade connecting Terminals 2 and 3 designed to create more space for passengers and better conditions for airlines and other tenants in the terminals. In addition, the number of check-in desks will be increased in order to match capacity to the expected increase in passenger numbers in the years ahead.

CPH retains its profit forecast for the full year
Based on the expected traffic programme for 2012, the total number of passengers is expected to increase. Traffic, however, could be adversely impacted by the continuing economic uncertainty in the Eurozone and any closure of routes due to airline reductions. The forecast is retained despite recent airline bankruptcies.

The increase in passenger numbers is expected to have a positive impact on total revenue. Operating costs are expected to be higher than in 2011, primarily due to the expected increase in passenger numbers, cost inflation and increased depreciation charges as a result of the higher level of investment with a focus on continuing growth. Overall, a higher total profit before tax, when excluding one-off items, is expected for 2012.

Under the charges agreement, CPH must invest an average of DKK 500 million annually, but CPH expects to invest significantly more than this in 2012.  CPH will also be investing in other commercial projects for the benefit of airlines and passengers.

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