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Fraport AG (FRG)

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Thursday 07 August, 2008

Fraport AG

Fraport Interim Report - First Half 2008: EBITD...

FRANKFURT AM MAIN, Germany, August 7 /PRNewswire/ --

- Outlook for Entire Year Remains Optimistic

    In the first six months of fiscal year 2008 the Fraport Group
registered sales revenue of EUR1,044.5 million, 7.1 percent below last year's
first half, which benefited from special effects. Adjusted for these effects,
however, sales revenue jumped by a noticeable 5.8 percent. At the same time,
EBITDA (earnings before interest, taxes, depreciation and amortization) in
the first two quarters of 2008 rose by 4.5 percent to EUR285.4 million; the
adjusted EBITDA advanced by 2.4 percent. Group profit in the first half of
2008 reached EUR93 million, 9.5 percent short of the previous year's level
due to higher interest expenses. The undiluted profit per share slipped from
EUR1.12 to EUR1.01.

    From January through June 2008, Fraport recorded 26,262,754
passengers at Frankfurt Airport, 2.2 percent more than in the first six
months of 2007. At Fraport's majority-owned airports (Frankfurt,
Frankfurt-Hahn, Antalya, Lima, Burgas and Varna), the number of passengers
climbed by 3.7 percent to 36,624,192 in the first half of 2008. Also in the
reporting period the Group's cargo (airfreight + airmail) throughput surged
6.1 percent year-on-year to 1,250,146 metric tons.

    The lower sales revenue was due to a loss of EUR79.6 million
in revenue because of Fraport's sale of its ICTS Europe security subsidiary
on April 1, 2008, and to revenue of EUR57.6 million received last year in
connection with the Airrail Center finance lease. Adjusted for these two
special effects, Group profits rose by 5.8 percent. In particular, this
increase can be attributed to the first-time full consolidation since August
2007 of Lima Airport (up EUR42.7 million). At Frankfurt Airport, higher
revenue was achieved especially from additional business in the Retail and
Properties segment.

    Operating expenses dropped by 8.7 percent to EUR813.1 million
in the reporting period. Adjusted for the aforementioned special effects,
operating expenses were up by eight percent year-on-year. This rise can also
be primarily attributed to the first-time full consolidation of Fraport's
Peruvian investment in Lima (up EUR30.6 million).

    Personnel expenses sank by 9.9 percent to EUR495.1 million due
to the sale of ICTS Europe in the first half of 2008. Adjusted, personnel
expenses grew under-proportionately by 3.6 percent compared to the same
period last year - despite the rise in personnel figures and the newly
negotiated collective pay settlement.

    Non-staff costs declined from EUR340.6 million in the first
half of 2007 to EUR318 million in the first half of 2008 due to the
previously mentioned special effects. On an adjusted basis, non-staff costs
increased by 15.8 percent.

    The personnel expense ratio of 47.4 percent was one percentage
point below the adjusted 2007 figure, while the non-staff cost ratio of 30.4
percent was 2.6 percentage points above.

    EBITDA in half-year comparison grew by 4.5 percent to EUR285.4
million. The EBITDA margin of 27.3 percent exceeded the previous year's
figure by three percentage points. Adjusted for the special effects, EBITDA
rose by 2.4 percent or EUR6.5 million over the adjusted half-year period in
2007 to EUR275.4 million. The financial result deteriorated noticeably from
minus EUR4.1 million in the comparable period last year to minus EUR48.7
million in the reporting period. This deterioration was mainly due to a
strong increase in interest expenses: resulting primarily from interest cost
compounded on Fraport's long-term liabilities for the concession payable to
operate Antalya, the liabilities in connection with the framework agreement
signed with Celanese AG/Ticona GmbH, and from increased capital investments.

    For the entire business year 2008, Fraport expects the pending
payment of EUR41.9 million under the German federal government's investment
guarantee for capital investments abroad (GKA) in connection with Fraport's
engagement in Manila to have a positive impact on Group profits. However,
when adjusted for this amount, Group profit will fall below the previous
year's level. In contrast to previous expectations, Fraport's Aviation
segment will achieve revenue growth due to increased security standards and
stronger demand for security services. In contrast, the unexpectedly high
collective pay settlement will have a negative impact on the results of the 
personnel-intensive Ground-handling segment. Fraport expects results to
advance for the Retail and Properties segment. The External Activities
segment will develop according to plan. However, profits could be curbed due
to the weak U.S. dollar.

    Despite the aforementioned changes, Fraport remains steadfast
in its forecast to raise Group EBITDA above the 2007 figure. Likewise,
revenue - adjusted for the one-time Airrail Center finance leasing effect and
the de-consolidation of ICTS Europe - is expected to exceed the previous
year's level.

    Photos (print quality) of Frankfurt Airport and Fraport AG may
be downloaded free of charge via the Internet at, menu
item "Press Center", then "Photo Archive".

    Furthermore, footage material for TV journalists is available
for downloading free of charge at

    For More Information, Please Contact:
    Fraport AG Frankfurt Airport Services Worldwide
    Robert A. Payne, B.A.A. - Manager International Press
    Press Office (Dept. UKM-PS), Corporate Communications (UKM)
    60547 Frankfurt am Main, Federal Republic of Germany
    Tel.: +49-69-690-78547; Fax: +49-69-690-60548;
    E-mail: [email protected]; Internet: http://


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