(RTTNews) - Shares of Fraport were losing around 4 percent in the German trading after the airport operator reported Tuesday a loss in its first half with sharply lower revenues, hurt by travel restrictions due to the coronavirus pandemic.
Looking ahead for fiscal 2020, Group result is forecast to remain clearly negative, and Group EBIT is expected to be negative. The company projects traffic at Frankfurt Airport and all of its group airports to drop by a high double-digit percentage rate.
In 2022/2023 as well, the company still expects passenger volumes at Frankfurt Airport to be around 15 to 20 percent below the high of 2019.
Following the cautious view, Fraport said it must streamline and downsize to make it even more efficient. The company plans to shed around 3,000 to 4,000 of the approximately 22,000 jobs across Fraport's Group companies in Frankfurt.
Fraport CEO Stefan Schulte said, "The economic effects of the pandemic will be felt well beyond the current year and permanently change our industry. We are therefore aligning our plans with the "new normal" that we expect to reach by 2022/2023. From this new starting point, we expect moderate long-term growth again."
Schulte noted that after reaching the bottom of the trough, traffic started to recover with the partial lifting of travel restrictions since mid-June. However, passenger numbers are still increasing at a very slow pace.
The company currently has nearly 3 billion euros in cash and committed credit lines. Fraport said liquidity is secured until at least the end of 2021.
For the first half, Group net result was negative 231.4 million euros, compared to prior year's profit of 164.9 million euros.
Group earnings before tax or EBT was negative 308.9 million euros, compared to positive 214.8 million euros a year ago. Group EBITDA, a key earnings metric, plunged 95.6 percent to 22.6 million euros.
In the first half , Group revenue slumped 48.9 percent from last year to 910.6 million euros. Adjusted Group revenue decreased 47.6 percent to 720.4 million euros.
All of Fraport's international airport subsidiaries, excluding Lima unit, recorded negative contributions.
Frankfurt Airport's passenger traffic fell 63.8 percent during the first half and 94.4 percent in the second quarter. At Fraport's Group airports worldwide, passenger traffic came to a virtual standstill in the second quarter, the company noted.
In the second quarter, the company cut operating expenses by nearly 40 percent for the whole Group and by about 30 percent at the Frankfurt location.
In Germany, Fraport shares were trading at 32.08 euros, down 3.95 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
