Consolidated Interim Management Report
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Consolidated interim management report for the nine-month period ending on 30 September 2018 Aena S.M.E., S.A. and subsidiaries Webcast / Conference-call: Telephones: 31 October 2018 Spain: +34 914 192 514 1 p.m. (Madrid time) United Kingdom: +44 (0) 330 336 9411 USA: +1 323 794 2588 https://edge.media-server.com/m6/p/auhgbgsb Access code: 3895736 WorldReginfo - 586d4309-76a7-4f4a-a043-83db8361afb6 Consolidated Interim Management Report 9M 2018 l Aena S.M.E., S.A. 1. Executive summary At 30 September 2018 the figures As regards international traffic, it Regarding the renewal of the continue to reflect Aena’s¹ positive has increased by 3.5%. Despite food and beverage offering at performance in terms of both this increase, we are seeing a Málaga-Costa del Sol Airport, operations and results. decline in the number of the new tenants started the passengers to and from the UK activity in September. The new The following aspects can be (-4.4%), due among other things spaces will occupy a total highlighted in this period: to the recovery of alternative surface area of more than touristic destinations to Spain 6,500 m², spread among 25 In relation to the Airport and the depreciation of sterling establishments, and the Regulation Document (DORA) with respect to the euro. implementation works of the new for the period 2017-2021, on 24 brands will be completed in the July 2018 the Board of Directors The increase in domestic traffic last quarter of 2018 and the first of Aena approved the proposed (+10.5%) was favoured by the of 2019. The new contracts charges for 2019, consisting in positive trend in the Spanish represent an estimated the freezing of the adjusted economy and by the increase in improvement of 30% in revenue maximum annual income per central government’s subsidy from this activity in Málaga passenger (IMAAJ) for 2019 from 50% to 75% to inter-island relative to 2017 (on a full-year relative to the maximum annual traffic with effect from 28 June basis and with the new minimum income per passenger (IMAP) 2017 and from 16 July 2018 to annual guaranteed rent). for 2018 established in the residents in the islands, Ceuta DORA at €10.42 per passenger. and Melilla flying to the The EBITDA for the period This freezing comes about as a mainland. reached 2,032.2 million euros result of the adjustments (including 59.8 million euros as a established by the regulation The growth in traffic at Aena's result of the consolidation of regarding the performance airports contributed to the Luton), which represents an incentives for levels of quality increase in total revenue to increase of 4.3%. and structure of traffic at year- €3,250.4 million (up by +5.0% on end 2017. the same period of 2017²), partly As for the upward pressure on offset by the 2.22% reduction in costs of services provided by On the operational side, traffic at airport charges from 1 March third parties seen in bidding the airports managed by Aena 2017 and another 2.22% from 1 processes since the end of 2016, continues to post new records, March 2018. this has affected “Other with a volume of 216.8 million operating expenses”, which passengers including Luton In commercial activity, it is worth increased by 10.0%. airport (up by +5.4%). mentioning that May saw the start of work on 49 food and From February to April, the new At the airports in the Spanish beverage points of sale awarded service contracted entered into network, traffic grew by 5.5%, in the first quarter of 2018 at operation to assist persons with reaching a new all-time record of Barcelona-El Prat Airport. The reduced mobility at the 20 main 204.1 million passengers, driven new offering involves an airports in the network. by the continuing favourable increase in the food and figures from the tourism sector beverage area of Barcelona The contracts for private security and the excellent performance of airport by 19% and the services awarded in the second domestic traffic. This growth is in incorporation of the latest quarter for 44 of the 47 airports line with Aena's passenger traffic gastronomic trends. for which tenders were invited, forecast for 2018, estimated to came into force between June increase by 5.5% (with a ± 1% The new contracts involve an and July 2018, and on 1 October margin) in the Spanish airport estimated increase in revenue at the Canary Island airports of network. from this business line in Tenerife Norte, Tenerife Sur and Barcelona of close to 30% La Palma. relative to 2017 on a full-year basis and with the new minimum annual guaranteed rents. ¹ Aena S.M.E., S.A. and Subsidiaries (“Aena” or “the Company”) 2 ² In this executive summary, the variation percentages for financial figures have been calculated by taking the figures in thousands of euros as the base. WorldReginfo - 586d4309-76a7-4f4a-a043-83db8361afb6 Consolidated Interim Management Report 9M 2018 l Aena S.M.E., S.A. Likewise, it is worth mentioning credit rating, with stable outlook aeronautical activity, the strategy the cleaning service and luggage in May 2018. focuses on consolidating trolleys that was awarded leadership, providing the airports between the second and the As for the execution of capital with greater capacity, third quarter for 19 airports. expenditure, the amount paid out maintaining competitive charges in the period amounted to and improving service quality Profit before tax reached €399.2 million (including levels. €1,342.2 million compared with €34.3 million invested in Luton €1,270.6 million in the same airport), representing an period of last year, and net profit In the second, Aena will work on increase of €152.8 million the diversification and search for for the period amounted to relative to the same period of €1,018.5 million, 5.5% more than new opportunities as a source of last year, of which €101.8 million future growth. For this purpose, that posted at 30 September corresponded to payments for 2017 (€965.5 million). commercial services will be capex executed and certified at redesigned and optimised, the the end of 2017. Capital Cash flow from operating development of real estate expenditure in the network of projects will be carried out and activities came to airports in Spain centred mainly €1,772.7 million for the period, international expansion will be on security and maintenance, in promoted. which involves a decrease of accordance with the regulated 2.8% compared with capex programme established in €1,823.3 million in the same On the occasion of the the DORA. presentation of the 2018-2021 period of 2017, affected by an extraordinary tax refund in 2017 Strategic Plan, the Company The reflection of Aena's announced that it estimates a (€110.5 million) and, in 2018, the operating and financial change of payment method by growth in passenger volume in performance in its share price the airports network in Spain of one airline from pre-payment to fluctuated during the period, in guarantee payment 2% for fiscal year 2019. This which the share price peaked at estimate is considered to vary by (€38.2 million). Excluding both €179.5 and reached a low point effects, the increase in net cash around ± 0.5%. of €142.1, ending the period at from operating activities would €149.5 (a fall of 11.5%) have risen by 5.7% Also, and in the framework of the compared with the IBEX35 which Strategic Plan 2018-2021, (€98.1 million). lost 6.5% in the same period. Aena’s Board of Directors approved a shareholder At 30 September 2018 the ratio After 30 September 2018, Aena of net financial debt to EBITDA remuneration policy consisting in presented its Strategic Plan for the distribution as dividends of (excluding Luton) as established the years 2018-2021 on 10 in the debt novation agreements an amount equivalent to 80% of October. The Plan, which was each individual year’s net profit, for the calculation of covenants approved by the Board of was reduced to 2.6x compared excluding non-recurring Directors on 29 May, aims to (exceptional) items. This policy to the 31 December 2017 figure consolidate the Company's of 2.8x. will be applied to the distribution strong growth and promote new of profits for 2018, 2019 and business lines that generate This financial solidity was 2020. However, the Board of value, through nine lines of Directors may change it in reflected in Moody’s upgrade of action that revolve around the Aena's credit rating in April 2018, exceptional circumstances, in two pillars of the Company: the the terms set forth in the policy. from “Baa1” to “A3”, with the regulated business and the outlook held at stable, and in unregulated business. In the first Fitch’s confirmation of its “A” one, the one associated with 3 WorldReginfo - 586d4309-76a7-4f4a-a043-83db8361afb6 Consolidated Interim Management Report 9M 2018 l Aena S.M.E., S.A. 2. Macroeconomic environment and activity figures 2.1. Traffic in the Aena airport network in Spain In the first nine months of 2018 28 June 2017 to inter-island traffic very competitive and to the impact passenger traffic in the airport and from 16 July 2018 to residents of Brexit being reflected in the network in Spain grew by +5.5%, in the islands, Ceuta and Melilla trends in exchange rates. reaching 204.1 million, a new record flying to the mainland.