Release Date: March 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fraport AG (FPRUF, Financial) achieved an all-time high EBITDA of EUR1.3 billion and a group result of more than EUR500 million, close to the record level of 2018.
- The group airports outside of Frankfurt have fully recovered to 2019 levels on average, with significant growth in Greece and Peru.
- Fraport AG (FPRUF) expects a turning point in Frankfurt traffic momentum, driven by new capacities and routes from airlines like Condor and EasyJet.
- The company is on track with major expansion programs, including the new terminal at Lima Airport and the upcoming opening of a new terminal in Antalya.
- Fraport AG (FPRUF) is implementing AI initiatives to increase operational efficiency and improve customer satisfaction at Frankfurt Airport.
Negative Points
- Fraport AG (FPRUF) faces challenges from high location costs and continued low supply of aircraft, impacting traffic growth in Frankfurt.
- The German aviation tax and increased security costs have made Germany one of the most expensive countries to operate, affecting competitiveness.
- The company expects a flat to down group result for 2025 due to non-recurring gains from the previous year and ongoing financial pressures.
- Ground handling remains a loss-making segment, with challenges in renewing the Lufthansa contract and improving financial stability.
- Fraport AG (FPRUF) does not expect to pay a dividend for the 2025 financial year, focusing instead on reducing leverage.
Q & A Highlights
Q: Do you have retail contracts in Terminal 2 running out this year, and do you expect to prolong these contracts until T2 will close next year?
A: (Matthias Zieschang, CFO) The retail contracts in Terminal 2 will be finalized at the end of the second quarter as airlines move to Terminal 3. We have solutions with concessionaires, and all contracts for Terminal 3 are awarded and preparing for takeover by April next year.
Q: Can you give us some initial indication on CapEx and free cash flow in 2026?
A: (Matthias Zieschang, CFO) For 2026, we expect a significant reduction in CapEx compared to 2025, primarily due to the completion of major projects like Lima and Terminal 3. We aim for a clearly positive free cash flow in 2026.
Q: What is the outlook for traffic in 2026, and when do you expect it to return to 2019 levels?
A: (Stefan Schulte, CEO) We are optimistic about traffic growth in 2026, especially if the German aviation tax is reduced and new aircraft deliveries occur. However, returning to 2019 levels will take at least three to four years.
Q: Why has the pickup in Porto Alegre been slow, and is there more compensation expected for its closure?
A: (Stefan Schulte, CEO) The slow recovery is due to airlines needing to restore capacities. We received compensation for the closure, but some infrastructure issues known before the flooding were not covered. The outlook for Porto Alegre is positive.
Q: What are your plans for the ground-handling segment, given its continued losses?
A: (Stefan Schulte, CEO) The main issue is the long-term contract with Lufthansa, which limits price increases. We aim to negotiate better terms and improve productivity. Exiting the business is not currently planned, as stability in ground operations is crucial.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
