AEROPORTO GUGLIELMO MARCONI DI BOLOGNA S.P.A. Consolidated Interim Financial Report at 31 March 2020
AEROPORTO G. MARCONI DI BOLOGNA S.P.A.
Consolidated Interim Financial Report Aeroporto Guglielmo Marconi di Bologna Group at March 31, 2020
This document is a courtesy translation from Italian into English. In case of any inconsistency
between the two versions, the Italian original version shall prevail
CONTENTS | ||
Ownership of the Parent Company Aeroporto Guglielmo Marconi di Bologna Spa | 3 | |
Board of Directors | 4 | |
Board of Statutory Auditors | 5 | |
Independent Audit Firm | 5 | |
Directors' Report at March 31, 2020 | 6 | |
Consolidated Financial Statements at March 31, 2020 | 40 | |
• | Statement of Consolidated Financial Position | 41 |
• | Consolidated Income Statement | 42 |
• | Consolidated Statement of Comprehensive Income | 43 |
• | Consolidated Cash Flow Statement | 44 |
• | Statement of Changes in Consolidated Shareholders' Equity | 45 |
Notes to the consolidated financial statements as at March 31, 2020 | 46 | |
Statement pursuant to Article 154 bis of the CFA | 75 |
Aeroporto Guglielmo Marconi di Bologna Spa | Pag. 2 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Aeroporto Guglielmo Marconi di Bologna Spa
Via Triumvirato, 84 - 40132 Bologna
Bologna Economic and Administrative Register No.:268716
Bologna Company Registration Office, Tax and VAT No.: 03145140376
Share capital: Euro 90,314,162.00 fully paid-in
Ownership of the Parent Company Aeroporto Guglielmo Marconi di Bologna Spa
According to the shareholder register and the notices received pursuant to Article 120 of Legislative Decree No. 58/98, the shareholders of the Parent Company, Aeroporto Guglielmo Marconi di Bologna S.p.A., with holdings of more than 3% were as follows at March 31, 2020:
SHAREHOLDER | % held |
BOLOGNA CHAMBER OF COMMERCE | 39.10% |
ATLANTIA S.P.A. (EDIZIONE S.R.L.) | 29.38% |
F2I FONDI ITALIANI PER LE INFRASTRUTTURE SGR SPA | 9.99% |
MUNICIPALITY OF BOLOGNA | 3.88% |
The following have been considered in presenting the Parent Company's ownership structure:
- interests held by the party reporting the holding, or by the party at the head of the chain of control of the holding
- interests deriving from notices submitted by shareholders or notices relating to significant shareholdings pursuant to Article 152 of the CONSOB Issuers' Regulation.
The list was updated as above as a result of the notice received from the Municipality of Bologna on April 17, 2020, in accordance with Consob Resolution No. 21326 of April 9, 2020, according to which any party who, as at the date of entry into effect of the rule, holds an interest in voting capital in excess of 3% (for SMEs) but below the threshold set out in Article 120, paragraph 2, of the TUF, was required to report this fact in the manner and on the terms provided for in that same Article 120, paragraph 2, of the TUF, within ten business days of the date concerned.
Furthermore, on June 5, 2018 the Bologna Chamber of Commerce, Municipality of Bologna, Metropolitan City of Bologna, Region of Emilia-Romagna, Modena Chamber of Commerce, Ferrara Chamber of Commerce, Reggio Emilia Chamber of Commerce and Parma Chamber of Commerce (collectively, the "Public Shareholders") entered into a shareholders' agreement (the "Shareholders' Agreement") governing certain rights and obligations in respect of the shareholder structure and corporate governance of Aeroporto Guglielmo Marconi di Bologna S.p.A.
This Shareholders' Agreement, filed at the Bologna Companies Registration Office on June 8, 2018 and sent to Consob on June 9, 2018, includes provisions on voting and transfer restrictions.
Following the purchase by the Bologna Chamber of Commerce of 565,500 Company shares on January 31, 2020, the number of voting rights subject to voting agreements changed, without any change in the number of voting rights subject to transfer restriction agreements, as shown in the following tables:
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
PUBLIC SHAREHOLDERS | % Share Capital subject to |
Voting Agreement | |
BOLOGNA CHAMBER OF COMMERCE | 39.10% |
MUNICIPALITY OF BOLOGNA | 3.88% |
METROPOLITAN CITY OF BOLOGNA | 2.31% |
REGION OF EMILIA ROMAGNA | 2.04% |
MODENA CHAMBER OF COMMERCE | 0.30% |
FERRARA CHAMBER OF COMMERCE | 0.22% |
REGGIO EMILIA CHAMBER OF COMMERCE | 0.15% |
PARMA CHAMBER OF COMMERCE | 0.11% |
PUBLIC SHAREHOLDERS | % Share Capital |
subject to Transfer | |
Restriction Agreement | |
BOLOGNA CHAMBER OF COMMERCE | 37.53% |
MUNICIPALITY OF BOLOGNA | 3.85% |
METROPOLITAN CITY OF BOLOGNA | 2.30% |
REGION OF EMILIA ROMAGNA | 2.02% |
MODENA CHAMBER OF COMMERCE | 0.08% |
FERRARA CHAMBER OF COMMERCE | 0.06% |
REGGIO EMILIA CHAMBER OF COMMERCE | 0.04% |
PARMA CHAMBER OF COMMERCE | 0.03% |
Board of Directors
The Board of Directors, appointed by the Shareholders' Meeting of April 29, 2019 and in office until the approval date of the financial statements as at December 31, 2021 are:
Name | Office |
Enrico Postacchini | Chairman |
Nazareno Ventola | Chief Executive Officer (*) |
Silvia Giannini | Director (B) |
Giada Grandi | Director (A) |
Eugenio Sidoli | Director (A) |
Valerio Veronesi | Director |
Marco Troncone | Director (B) |
Gennarino Tozzi | Director |
Laura Pascotto | Director (A) (B) |
-
confirmed Chief Executive Officer by the Board of Directors on May 6, 2019, maintaining the position of General Manager. He has also been appointed as Director responsible for the Internal Control and Risk Management System.
(A) Member of the Remuneration Committee (Chairman Eugenio Sidoli)
(B) Member of the Control & Risks Committee (Chairperson Silvia Giannini)
Aeroporto Guglielmo Marconi di Bologna Spa | Pag. 4 |
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Board of Statutory Auditors
The Board of Statutory Auditors, appointed by the Shareholders' Meeting of April 29, 2019 and in office until the approval date of the financial statements as at December 31, 2021 are:
Name | Office |
Pietro Voci | Chairman |
Samantha Gardin | Statutory Auditor |
Alessandro Bonura | Statutory Auditor |
Violetta Frasnedi | Alternate Auditor |
Alessia Bastiani | Alternate Auditor |
Independent Audit Firm
EY S.p.a. was appointed as the independent audit firm by the Shareholders' Meeting of May 20, 2015 for the financial years 2015-2023.
Aeroporto Guglielmo Marconi di Bologna Spa | Pag. 5 |
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Directors' Report of Aeroporto Guglielmo Marconi di Bologna S.p.A. Group at March 31, 2020
Aeroporto Guglielmo Marconi di Bologna Spa | Pag. 6 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
1.1 AIR TRANSPORT GENERAL SECTOR AND PERFORMANCE: G. MARCONI AIRPORT OVERVIEW AND
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
7 MAIN RISKS AND UNCERTAINTIES .......................................................................................................................... | 35 |
8 ALTERNATIVE PERFORMANCE INDICATORS ............................................................................................................ | 37 |
9 GUARANTEES PROVIDED ........................................................................................................................................ | 37 |
10 SUBSEQUENT EVENTS AND BUSINESS OUTLOOK .................................................................................................. | 38 |
Aeroporto Guglielmo Marconi di Bologna Spa | Pag. 8 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
INTRODUCTION
This report, accompanying the interim Condensed Consolidated Financial Statements of the Aeroporto Guglielmo Marconi di Bologna Group (hereinafter also the "Aeroporto Group", "Aeroporto" or "AdB") for the three months ended March 31, 2020, in presenting the Group's performance indirectly analyses also the performance of the Parent Company, Aeroporto Guglielmo Marconi di Bologna S.p.A., the holder of the concession for the full management of Bologna Airport, i.e. Full Management Concession No. 98 of July 12, 2004 and subsequent Additional Deeds, approved by Decree of the Ministry of Transport and Infrastructure and of the Economy and Finance of March 15, 2006, with a term of 40 years starting on December 28, 2004.
The Group's structure at March 31, 2020 and a brief description of the type and businesses of its subsidiaries and associates is presented below:
- Tag Bologna S.r.l. (hereinafter also "TAG"), formed in 2001 and operational since 2008, following the completion and opening of the General Aviation Terminal and hangar. In addition to managing the above infrastructure at Bologna airport, the company operates as a handler in the General Aviation sector; The Parent Company on October 2, 2018, taking the opportunity to better control the dedicated airside flight infrastructure, acquired 49% of TAG to gain full ownership;
- Fast Freight Marconi Spa (hereinafter also "FFM"), formed in 2008 by the former subsidiary Marconi Handling S.r.l. (GH Bologna Spa with effect from April 1, 2017), following the contribution of a cargo and mail handling business unit based out of Bologna airport. The Parent Company acquired a 100% interest in FFM in 2009;
- Ravenna Terminal Passeggeri S.r.l. (hereinafter also "RTP"), formed in 2009 together with various public and private shareholders operating in the cruise industry to carry out activities related to the concession for managing the Porto Corsini Maritime Station Service (Ravenna).
The amounts in the tables in this Directors' Report are in thousands of Euro, whereas those in the comments are in millions of Euro, unless otherwise indicated. The data is from internal company sources unless otherwise indicated.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Business Description
Airport business may be divided into aviation and non-aviation activities. Aviation activities primarily consist of managing, maintaining and developing airports, which also includes security checks and surveillance, as well as aviation services for passengers, other users and airport operators and marketing activities to develop passenger and cargo traffic. Non-aviation activities primarily consist of developing airport real estate and commercial potential.
Based on the nature of operations, the Group manages the airport through the following Strategic Business Units (SBU's):
- Aviation Strategic Business Unit
- Non-AviationStrategic Business Unit.
Aviation SBU
The Aviation SBU's main activities involve managing and developing airport infrastructure and in particular of:
- providing customers and operators with efficient access to all infrastructure, both land side (terminal, baggage sorting, car parking, traffic and cargo storage) and air side (aircraft runways and aprons);
- providing security services and services for passengers with reduced mobility (PRM's);
- informing the public and airport users;
- developing, revamping and expanding airport infrastructure, including installations and equipment, ensuring compliance with applicable legislation.
Consideration for such services takes the form of airport charges of the following types paid by airlines, airport operators and passengers:
- passenger service fees: these fees are due for the use of infrastructure, installations and common areas required for passenger boarding, disembarkation and hospitality and are based on the number of departing passengers, as well as whether they are bound for destinations within or outside the EU, with reductions for minors;
- take-offand landing fees: these fees are due for all aircraft that take off and land and are calculated on the basis of the aircraft's maximum authorised weight at take-off and the type of flight (commercial or general aviation);
- aircraft parking fees, calculated according to maximum weight at take-off;
- freight fees for boarding and disembarking cargosbased on the weight of the cargo carried by aircraft;
- refuelling fees, assessed per cubic metre of fuel supplied to aircraft.
The Aviation SBU's other major revenue sources are:
- departing passenger security fees: these fees are due for providing security check services, including the personnel and equipment used by the manager to provide this service;
- checked baggage security fees: these fees are due for the equipment and personnel responsible for performing such checks;
- PRM fees: they include the fees paid for services for passengers with reduced mobility and are based on the number of departing passengers (PRM and otherwise);
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- fees for the exclusive use of premises: they include fees for using airport infrastructure dedicated to individual carriers or operators (check-in desks, offices, operating premises), calculated according to the duration of use, floor area and/or location and type of the premises used;
- centralised infrastructure fees: these fees refer solely to aircraft de-icing services and are based on the number of winter flights;
- cargo handling and general aviation feesand fees due for the related activities such as customs clearance and refuelling.
Non-Aviation SBU
The Non-Aviation SBU's main activities relate to parking management, retail sub-concessions, advertising, services for passengers and real estate management.
Parking
Bologna airport's directly operated paid parking areas offer approximately 5,300 available car parking spaces, located in three parking areas: the first close to the terminal, the second close to airport grounds and the third located at approx. 1.5 KM away. The airport's increasing popularity in recent years has also driven a number of private companies to enter the market, creating competing parking lots in the vicinity of the airport, with shuttle bus services to the terminal.
Retail
Bologna airport's retail offerings include internationally recognised brands with local ties and some of the leading local, domestic and international retail and catering chains. The shopping area extends over approximately 4,500 m² and includes 43 shops. The latest airport upgrade developed the Duty-free areas - one of the SBU's main revenue sources.
Advertising
Advertising is managed using digital and large-formatback-lit displays located in areas of the terminal's interior and exterior where the advertisements are highly visible. Campaigns involving the personalisation of particular areas or furnishings located in the airport are sometimes conducted.
Passenger services
Passenger services include a business lounge operated directly by the Parent Company. The Marconi Business Lounge(MBL) is an exclusive, comfortable environment used mostly by business passengers travelling with the major legacy carriers. In addition, the "You First" service provides arriving and departing passengers with access to exclusive services such as check-in and baggage collection assistance, porterage, gate assistance and priority boarding.
The other services available to passengers include car rentals. Nine rental companies are based at Bologna airport, offering a total of 17 specialised brands and 489 vehicles available at the airport.
Real Estate
Real estate activity is divided into two general areas: sub-concession revenues for aviation-related commercial activities, above all express couriers, and sub-concession revenues for handling services, which are subject to regulated tariffs.
The total commercial premises under sub-concession extend to over 90,000 square metres, of which over 70,000 square metres of offices, warehouses, technical service areas and hangars and approximately 20,000 square metres of outdoor space used for parking operating vehicles, manoeuvring in loading and loading areas and aircraft refuelling vehicle areas.
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1 STRATEGIES AND RESULTS
1.1 AIR TRANSPORT GENERAL SECTOR AND PERFORMANCE: G. MARCONI AIRPORT OVERVIEW AND POSITIONING
In the first few months of 2020, the global economy had already begun to suffer the negative effects of the Covid-19 pandemic and the strict containment measures adopted to prevent its spread: the consequences of the health emergency will have a substantial impact on global economic performance throughout this year. It was this very deterioration of growth prospects for 2020 that translated into a sharp decline in market indices and an abrupt rise in volatility and risk averseness on financial markets. Given the extraordinary nature of the situation, the monetary and tax authorities in all major countries implemented considerable expansionary measures designed to support household incomes and business continuity, while also ensuring the necessary liquidity and promoting supported access to credit.
The impact of the pandemic on global growth - extremely complex to quantify - is likely to be very significant: international institutions have repeatedly revised their forecasts sharply downwards. The International Monetary Fund estimates that global GDP will contract by 3.0% in 2020, to a greater degree in advanced nations than in emerging economies, owing to containment measures that are broader and more stringent on average.
In the main advanced economies, within a scenario in which consumer prices were already growing more slowly than the target rates set by central banks, the long-term inflation expectations based on financial market returns have now fallen even further.
The global macroeconomic situation in the first quarter of the year is completed by the sharp drop in the price of oil to well below the lows reached during the 2008-09 financial crisis, exacerbated in recent months by concerns of slowing economic activity as a result of the pandemic. In mid-April the members of OPEC+, with the support of the G20 nations, reached an agreement regarding a dramatic cut to oil production.
Within the Eurozone, after an initially faster start in Italy, the epidemic spread to all countries. To counteract the decline in aggregate activity and demand and to prevent permanent economic consequences, the main European institutions (European Commission, ECB and EIB) prepared several significant initiatives in response to the spread of the epidemic, mainly in support of healthcare spending, employment and access to credit.
In Italy, the effects of the spread of the disease on economic activity swept over the national economy when economic activity was already slowing, with GDP already contracting slightly (-0.3%) in the final three months of 2019. According to the Bank of Italy, while on the one hand the extension of the measures to contain the Covid-19 pandemic will continue to entail a significant decline in GDP in the second quarter, on the other the financial structure with which businesses and households are facing this difficult economic phase is substantially more balanced than that which they presented on the eve of the sovereign debt crisis. In addition, the banking system's initial balance sheet and liquidity conditions are more robust than
in the past (source: Economic Bulletin, Bank of Italy, April 2020).
Within this scenario, according to IATA figures, global passenger traffic declined by 22.2% in the first quarter of 2020: attention should be drawn to the particularly negative performance in March (-52.9%), when the pandemic began its rapid spread to the entire planet.
However, cargo traffic was less negative at the global level, with a decline in volumes of 7.7% on the same period of 2019
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The decline in passenger traffic within the European Continent came to -18% overall in the first quarter of 2020, with a peak drop, according to ACI Europe, of -97% at the end of March, at the height of the health emergency. Cargo traffic performance was also less negative than passenger traffic performance in Europe, with cargo volumes handled in the first quarter down by 10%
Analysis (IATA), March 2020).
In the first three months of 2020 the Italian market was severely affected by the restrictive measures designed to contain the pandemic, with a decline in passenger traffic of -31.8%(source:Assaeroporti, March 2020). Bologna airport also ended the first quarter of 2020 with a significant decline in traffic of 28.9%, in line with the national trend. However, the airport was number-four in Italy by number of passengers.
1.2 STRATEGIC OBJECTIVES
The Group in 2020 continues to pursue the strategic objectives underlying all operations. The core strategic guidelines are:
"Connect"
The Group seeks to maintain a varied range of flight offerings suited to various types of users by adding to the number of airlines operating out of the airport, while continuing to maintain good margins also on the new traffic generated. In terms of traffic development, the Group targets the adding of routes, with the introduction of new Eastern and long-haul destinations, while boosting frequencies to existing destinations. The Group also focuses on improving airport accessibility, through the development of ground connections and the expansion of its catchment area.
"Develop"
The investments outlined in the Master Plan and Regulatory Agreement are fundamental to the development of the company's business. The strategy in question calls for an efficient use of the existing infrastructure's capacity and modular implementation of new investments to ensure that infrastructure capacity keeps pace with expected traffic development. The passenger terminal expansion project is a key part of the infrastructure development plan, permitting the development of - in particular - the security control areas and the boarding gates, in addition to extending dedicated commercial space.
The Group also plans to develop non-aviation business with the opening of new stores, new car spaces and the extension of the range of services available to passengers.
"Experience"
The Group is focused on ensuring the constant improvement of the services offered to airport users in its fields of operation, both directly and indirectly, while also constantly improving its standards of security, quality and respect for the environment. In order to support and improve all aspects of operations and generate Customer loyalty, the Group considers it key to develop a culture of innovation which revolves around the installation of technology that facilitates greater interaction with passengers and optimises the airport travelling experience.
"Care"
The Group is committed to all aspects of sustainability, ranging from those of an environmental nature to compliance with ethical and social principles, in view of the important role which Bologna airport plays as a vital hub for the region. The Group also strives to develop those who work at the Airport and build an organisation which responds to the evolving demands of the market and which supports the individual in their work.
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The Group has furthermore identified two overarching guidelines to the strategic objectives identified above which are viewed as a touchpoint for company operations:
"Maximise financial performance"
The Group is focused on consistently improving the financial performance and on ensuring an adequate return for shareholders.
"Performing and sustainable corporation"
The Group aims to improve the efficiency and efficacy of its processes and internal structure, with a view to improving company performance and development, while paying increasing attention to sustainability in its environmental, social and governance components.
1.3 SHARE PERFORMANCE
AdB's shares began trading on the STAR segment of the Milan Stock Exchange on July 14, 2015. The following graphs present:
- the share performance between January 1, 2020 and March 31, 2020;
- tracking of the company's share performance against the FTSE Italiaall-share index.
On March 31, 2020, the official share price was Euro 7.76 per share, resulting in an AdB Group market capitalisation of Euro 280.3 million at that date.
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AdB share performance (01/01/2020-31/03/2020)
Jan '20
AdB share and FTSE Italia All-Share performance (01/01/2020-31/03/2020)
(01/01/2019-31/03/2019)
AdB -FTSE Italia All-Share
Jan '20
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AdB share performance - prices and volumes (01/01/2020-31/03/2020)
The prices and volume performance of AdB shares in the first quarter of 2020 was characterised by two distinct phases: a first, from the beginning of the year until February 23, 2020, the day of the first Prime Ministerial Decree containing restrictive and containment measures, and a second, from February 24 until the end of the quarter.
In the first phase the price was stable, between Euro 11.50 and Euro 12.00, with fewer than 7,000 shares traded daily. Following the outbreak of the health crisis tied to the spread of Covid-19, the shares declined rapidly, reaching a low of Euro 6.57 on March 12, 2020, with volumes fluctuating between 40 and 50 thousand shares traded daily in several sessions. In the second half of March volatility declined considerably, with the price stabilising at Euro 8.00 a share.
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2. KEY OPERATING RESULTS ANALYSIS
2.1 AVIATION STRATEGIC BUSINESS UNIT
2.1.1 AVIATION STRATEGIC BUSINESS UNIT: TRAFFIC DATA
Following the excellent performance recorded in January (+9.9% on 2019), in February the airport reported passenger trafficin line with 2019 (+0.3%) due to a sound performance in the first three weeks of the month (+5.3% on 2019), followed by a sharp reversal of course starting on February 22 (-25.1% in the final eight days of the month) due to the effect of the Covid-19 health emergency.
Due to the cancellations gradually announced by the airlines as the emergency worsened, passenger traffic declined by 69.9% in the first two weeks of March and by 99% in the third and fourth weeks of the month, resulting in an overall decrease in March of approximately 86% (-65% at the level of flights) compared to 2019.
In response to the spread of the epidemic, the Decree of the President of the Council of Ministers of February 23, 2020 established "red zones" in Lombardy, Veneto and Emilia-Romagna, imposing limitations on movement within Italy that also affected airport traffic; in the preceding days, the authorities had halted flights from China and required arriving passengers to have their temperature measured at airports. The subsequent Decrees of March 4 and 11, 2020 extended the restrictions on movement to the entire country, resulting in the cancellation of almost all domestic and international flights at airports.
Despite the minimal traffic volumes, Bologna airport remained open and operational throughout the quarter, since it was included in the list of airports in Ministerial Decree No. 112 of March 12, 2020. Consequently, in the first quarter of 2020 passenger traffic declined by 28.9% and flights by 21.1% overall on the same period of 2019.
Passenger traffic performance Q1 2020
Cargo trafficin the first quarter of 2020 amounted to 10,635,534 kg, reducing 15.7% on 2019. This decline was primarily due to the decrease in air freight in March as a result of the Covid-19 health emergency, which entailed a sharp reduction in business, whereas ground freight shipments slowed only slightly compared to 2019.
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January - March 2020 | January - March 2019 | Change % | ||
Passengers | 1,395,671 | 1,961,807 | -28.9% | |
Movements | 13,349 | 16,922 | -21.1% | |
Tonnage | 910,212 | 1,116,241 | -18.5% | |
Cargo | 10,635,534 | 12,622,100 | -15.7% | |
Data includes General Aviation and transits
The decline in passenger traffic volumes affected all components since the cancellations since the cancellations in March applied equally to legacy and low-cost carriers. In contrast, in the first two months of 2020 low cost traffic performed very robustly, whereas legacy traffic remained essentially unchanged on 2019.
Passenger traffic breakdown | January - March | % of total | January - March | % of total | % Change | |||||||
2020 | 2019 | |||||||||||
Legacy | 522,913 | 37.5% | 791,467 | 40.3% | (33.9%) | |||||||
Low cost | 862,141 | 61.8% | 1,155,977 | 58.9% | (25.4%) | |||||||
Charter | 8,073 | 0.6% | 10,282 | 0.5% | (21.5%) | |||||||
Transits | 1,604 | 0.1% | 2,821 | 0.1% | (43.1%) | |||||||
Total Commercial Aviation | 1,394,731 | 99.9% | 1,960,547 | 99.9% | (28.9%) | |||||||
General Aviation | 940 | 0.1% | 1,260 | 0.1% | (25.4%) | |||||||
Total | 1,395,671 | 100.0% | 1,961,807 | 100.0% | (28.9%) | |||||||
All destinations served from Bologna airport declined as a result of the Covid-19 health emergency.
2.1.2 AVIATION STRATEGIC BUSINESS UNIT: FINANCIAL HIGHLIGHTS
in thousands of Euro | for the quarter ended | for the quarter ended | Change | % Change | ||||||
31.03.2020 | 31.03.2019 | |||||||||
Passenger Revenues | 8,243 | 12,455 | (4,212) | -33.8% | ||||||
Carrier Revenues | 4,821 | 5,805 | (984) | -17.0% | ||||||
Airport Operator Revenues | 508 | 728 | (220) | -30.2% | ||||||
Traffic Incentives | (3,750) | (5,698) | 1,948 | -34.2% | ||||||
Revenues from Construction Services | 1,442 | 3,735 | (2,293) | -61.4% | ||||||
Other revenues | 352 | 352 | 0 | 0.0% | ||||||
Aeronautical and FSC Revenue Reduction | (17) | 0 | (17) | n.a. | ||||||
Total AVIATION SBU Revenues | 11,599 | 17,377 | (5,778) | -33.3% | ||||||
The Aviation Strategic Business Unit's revenues consist of fees paid by users (passengers and airlines) and airport operators for the use of the infrastructure and services provided on an exclusive basis by the Group for landing, take-off, lighting, aircraft parking and passenger and cargo operations, in addition to centralised infrastructure and exclusive-use premises.
Given the public utility aspect of airport services, airport charges are regulated by both national and EU legislation. The new regulations and implementation measures - including the models approved by the
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Transport Regulation Authority - require that changes to the system or amount of airport fees be made with the consent, on the one hand, of the airport manager, and of the airport's users on the other.
The decline in revenues in the first quarter of 2020 compared with the same period of 2019 is primarily due to the reduction in traffic volumes recorded from the end of February due to the effect of the Covid-19 health emergency, in addition to a decrease in the average tariff and in revenues for construction services. It should be noted that until the health emergency began, revenues had exceeded 2019, driven by a positive traffic performance in the first two months of the year.
Group revenues from the Aviation Strategic Business Unitwere down 33.3% overall on 2019. The individual accounts broke down as follows:
- Passenger Revenues(-33.8%): the decline in passenger revenues slightly exceeded the decrease in passenger traffic (-28.9%) due to the tariff update applied from January 1, 2020, which resulted in a decrease in tariffs for this category of revenues;
- Carrier Revenues(-17.0%): Carrier revenues fell slightly less than total tonnage, due to the increased take-off and landing tariffs;
- Airport Operator Revenues(-30.2%): revenues declined due to the decrease in traffic volumes and the revision of fees due for premises and operating equipment granted by the manager to support operators during this emergency phase;
- Incentives: the decline in incentives on 2019(-34.2%) is related to the decrease in incentivised traffic;
- Construction Service Revenues: the decline(-61.4%) related to lesser investments compared to the same period of the previous year, also considering the rescheduling of work required by the ongoing health emergency.
2.2 NON-AVIATION STRATEGIC BUSINESS UNIT
2.2.1 NON-AVIATION STRATEGIC BUSINESS UNIT: FINANCIAL HIGHLIGHTS
in thousands of Euro | for the quarter ended | for the quarter ended | Change | % Change | ||||||
31.03.2020 | 31.03.2019 | |||||||||
Retail and Advertising | 2,755 | 3,378 | (623) | -18.4% | ||||||
Parking | 2,658 | 3,663 | (1,005) | -27.4% | ||||||
Real Estate | 605 | 602 | 3 | 0.5% | ||||||
Passenger services | 1,118 | 1,413 | (295) | -20.9% | ||||||
Revenues from Construction Services | 1,314 | 369 | 945 | 256.1% | ||||||
Other revenues | 762 | 687 | 75 | 10.9% | ||||||
Total NON AVIATION SBU Revenues | 9,212 | 10,112 | (900) | -8.9% | ||||||
Total non-aviationbusinessrevenues in the period declined 8.9%, with all the main revenue items decreasing.
The individual areas of this business unit performed as follows.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Retail and Advertising
The decrease in revenues on 2019 (-18.4%) was due to the Covid-19 emergency, which caused a dramatic decline in traffic volumes as result of the progressive cancellation of flights at the airport, followed by the shutdown of almost all commercial establishments (stores and restaurants) per the Decree of March 11, 2020 and by the progressive reduction of the sale of advertising spaces. This situation resulted in the reduction of the variable component to zero, in addition to a decline in fixed fees granted by the manager to sub-concessionaires to support them during this emergency phase.
Parking
In the first quarter of 2020, parking and rail access revenues declined 27.4% over the same period of the previous year due to the progressive cancellation of flights at the airport, which reduced revenues essentially to zero in the final days of March.
Real Estate
Real-estate revenues are in line with the first quarter of 2019, due to the minimal impact of the ongoing emergency on this business.
Passenger services
In Q1 2020, passenger services were down 20.9% over 2019, due to both premium (lounge and accessory services) and self-hire services, whose performance is outlined below.
Premium services
In the first quarter of 2020 this business reported a decline in revenues in line with passenger traffic performance. Due to the progressive cancellation of flights, the Business Lounge was closed to the public from March 17, 2020.
Self-hiresub-concessions
Car rental revenues showed a decline in both the variable component and fixed fees, the latter granted by the manager to sub-concessionaires to support them during this emergency phase. Car rental activities were not entirely suspended since service must be ensured for passengers travelling through Bologna airport.
Revenues from Construction Services
This item's growth (+256.1%) relates to increased investment in the business unit over the same period of the previous year.
Other revenues:the growth of other revenues (+10.9%) is mainly due to the new management of aircraft de-icing fluid, purchased and managed by AdB and sold to the handler to provide the service.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
3 ANALYSIS OF THE OPERATING RESULTS, FINANCIAL POSITION AND CASH FLOWS:
3.1 CONSOLIDATED OPERATING RESULTS ANALYSIS
in thousands of Euro | for the quarter ended | for the quarter ended | Change | % Change | ||||||
31.03.2020 | 31.03.2019 | |||||||||
Revenues from aeronautical services | 9,906 | 13,400 | (3,494) | -26.1% | ||||||
Revenues from non-aeronautical services | 8,029 | 9,794 | (1,765) | -18.0% | ||||||
Revenues from construction services | 2,757 | 4,104 | (1,347) | -32.8% | ||||||
Other operating revenues and income | 119 | 191 | (72) | -37.7% | ||||||
REVENUES | 20,811 | 27,489 | (6,678) | -24.3% | ||||||
Consumables and goods | (508) | (425) | (83) | 19.5% | ||||||
Service costs | (4,730) | (5,013) | 283 | -5.6% | ||||||
Construction service costs | (2,625) | (3,908) | 1,283 | -32.8% | ||||||
Leases, rentals and other costs | (1,418) | (1,885) | 467 | -24.8% | ||||||
Other operating expenses | (794) | (765) | (29) | 3.8% | ||||||
Personnel costs | (6,537) | (7,145) | 608 | -8.5% | ||||||
COSTS | (16,612) | (19,141) | 2,529 | -13.2% | ||||||
GROSS OPERATING PROFIT (EBITDA) | 4,199 | 8,348 | (4,149) | -49.7% | ||||||
Amortisation of concession rights | (1,643) | (1,500) | (143) | 9.5% | ||||||
Amortisation of other intangible assets | (302) | (273) | (29) | 10.6% | ||||||
Depreciation of tangible assets | (648) | (697) | 49 | -7.0% | ||||||
DEPRECIATION, AMORTISATION AND IMPAIRMENT | (2,593) | (2,470) | (123) | 5.0% | ||||||
Provisions for doubtful accounts | (225) | (25) | (200) | 800.0% | ||||||
Provision for renewal of airport infrastructure | (478) | (475) | (3) | 0.6% | ||||||
Provisions for other risks and charges | (4) | (94) | 90 | -95.7% | ||||||
PROVISIONS FOR RISKS AND CHARGES | (707) | (594) | (113) | 19.0% | ||||||
TOTAL COSTS | (19,912) | (22,205) | 2,293 | -10.3% | ||||||
OPERATING RESULT | 899 | 5,284 | (4,385) | -83.0% | ||||||
Financial income | 94 | 39 | 55 | 141.0% | ||||||
Financial expenses | (101) | (299) | 198 | -66.2% | ||||||
RESULT BEFORE TAXES | 892 | 5,024 | (4,132) | -82.2% | ||||||
TAXES FOR THE PERIOD | (273) | (1,477) | 1,204 | -81.5% | ||||||
PROFIT FOR THE PERIOD | 619 | 3,547 | (2,928) | -82.5% | ||||||
Profit (loss) for the period - Minority interests | 0 | 0 | 0 | 0 | ||||||
Profit for the period - Group | 619 | 3,547 | (2,928) | -82.5% |
The consolidated net profit for the first quarter of 2020 was Euro 619 thousand, down 82.5% on Euro 3.5 millionin 2019. The negative result was due to the decline in traffic caused by the Covid-19 emergency, with an impact on all main components of the business from the end of February.
Operating revenuesoverall declined 24.3% on 2019. Specifically:
- revenues from aeronautical serviceswere down 26.1% due to the traffic decline and the tariff update;
- revenues fromnon-aeronauticalservicesdeclined 18.0% due to the performance of all category components, as outlined in the relative section;
- revenues from construction servicesdeclined 32.8% following the reduction of investments in the aviation sector, not fully offset by the greater investments in the non-aviation sector;
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
- otheroperating revenues and income: the decrease of 37.7% on 2019 is mainly due to lower sales of energy efficiency certificates.
The costsfor the period declined by 13.2% overall on the same period in 2019 following the decrease in traffic and efficiency enhancement measures implemented to reduce the impact of the decline in volumes on profitability, with benefits that, however, were contained in March.
These break down as follows:
- consumables and goodsincreased (+19.5%) due to the direct purchase of aircraft de-icing fluid, previously governed by the contract with the handler, offset by the corresponding sales revenue;
- service costswere lower (-5.6%) than in the same period of 2019, in particular owing to the reduction of various services correlated to traffic (e.g., PRM, MBL, etc.), the containment of utilities costs due to the lesser use of some areas of the terminal and the renegotiation of several service contracts, with an impact that, however, remained minimal in the first quarter.
- construction service costsdeclined by 32.8% due to the lesser investments made;
- the decrease of 24.8% over 2019 in thelease, rentals and other costsaccount is mainly due to the decline in traffic volumes, on whose basis the concession and security fees are calculated.
- other operating expenseswere substantially in line with the previous year, as these are costs not directly correlated with operating activity.
Reference should be made to the personnel costs section of this report for further details.
Overall, in the period January-March 2020 EBITDAwas down by 49.7% on the same period in 2019, due to lower revenues and more rigid costs, considering the high fixed cost structure characteristic of airport managers.
In terms of overheads, amortisation and depreciation were up by 5% on the basis of the amortisation and depreciation schedule and new Group investments, whereas provisions rose by 19%, mainly due to the greater debt provision in view of the current crisis.
The 10.3% decrease in overall costs against the 24.3% reduction in revenues resulted in the Operating Resultdeclining 83%: from Euro 5.3 million in the first three months of 2019 to Euro 900 thousand in Q1 2020.
Net financial expensesamounted to Euro 7 thousand, compared to expenses of Euro 260 thousand in the first quarter of 2019, due mainly to the discounting income on provisions and financial liabilities of Euro 82 thousand, compared to discounting charges of Euro 173 thousand in the first quarter of 2019, in addition to the reduction in bank interest expense as a result of the decline in debt (-Euro 22 thousand).
As a result of that outlined above, the Result before taxesfor Q1 2020 was Euro 892 thousand, against Euro 5 million in Q1 2019, a decline of 82.2%.
Due to the reduction in the result before taxes, income taxesfell to Euro 273 thousand from Euro 1.5 million in the first quarter of 2019. The profitfor the period, entirely concerning the Group, was Euro 619 thousand, compared with Euro 3.5 million in Q1 2019.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
The EBITDAadjusted for the construction services margin is presented below:
in thousands of Euro | for the quarter | for the quarter | Change | % Change | ||||||
ended 31.03.2020 | ended 31.03.2019 | |||||||||
Revenues from aeronautical services | 9,906 | 13,400 | (3,494) | -26.1% | ||||||
Revenues from non-aeronautical services | 8,029 | 9,794 | (1,765) | -18.0% | ||||||
Other operating revenues and income | 119 | 191 | (72) | -37.7% | ||||||
ADJUSTED REVENUES | 18,054 | 23,385 | (5,331) | -22.8% | ||||||
Consumables and goods | (508) | (425) | (83) | 19.5% | ||||||
Service costs | (4,730) | (5,013) | 283 | -5.6% | ||||||
Leases, rentals and other costs | (1,418) | (1,885) | 467 | -24.8% | ||||||
Other operating expenses | (794) | (765) | (29) | 3.8% | ||||||
Personnel costs | (6,537) | (7,145) | 608 | -8.5% | ||||||
ADJUSTED COSTS | (13,987) | (15,233) | 1,246 | -8.2% | ||||||
ADJUSTED GROSS OPERATING PROFIT (ADJUSTED EBITDA) | 4,067 | 8,152 | (4,085) | -50.1% | ||||||
Revenues from construction services | 2,757 | 4,104 | (1,347) | -32.8% | ||||||
Construction service costs | (2,625) | (3,908) | 1,283 | -32.8% | ||||||
Construction Services Margin | 132 | 196 | (64) | -32.7% | ||||||
GROSS OPERATING PROFIT (EBITDA) | 4,199 | 8,348 | (4,149) | -49.7% |
The table below shows the monthly passenger trafficperformance and EBITDAof the Parent Company adjusted for the construction services margin to emphasise the incidence of the dramatic decline in traffic and profitability caused by the outbreak of the pandemic in March on the results for the entire quarter:
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
3.2 CASH FLOW ANALYSIS
The consolidated cash flow statement, indicating cash flows generated/absorbed from operating, investing and financing activities, is summarised below:
Euro thousands | As at 31.03.2020 | As at 31.03.2019 | Change | ||||
Cash flow generated / (absorbed) by operating activities before working | 4,120 | 8,185 | (4,065) | ||||
capital changes | |||||||
Cash flow generated / (absorbed) by net operating activities | 639 | 3,361 | (2,722) | ||||
Cash flow generated / (absorbed) by investment activities | (3,018) | 9,660 | (12,678) | ||||
Cash flow generated / (absorbed) by financing activities | (57) | (220) | 163 | ||||
Change in closing cash flow | (2,436) | 12,801 | (15,237) | ||||
Cash and cash equivalents at beginning of period | 29,253 | 15,762 | 13,491 | ||||
Change in closing cash flow | (2,436) | 12,801 | (15,237) | ||||
Cash and cash equivalents at end of period | 26,817 | 28,563 | (1,746) | ||||
Cash flows generated by operating activities before changes in working capital amount to Euro 4.1 million, decreasing sharply on the same period of 2019(-Euro4 million), in line with the operating performance for the quarter outlined in the foregoing sections. Working capital absorbed resources of Euro
3.5 million, down on the first quarter of 2019, mainly due to the reduction in trade receivables and the ensuing positive cash flow from net operating activitiesof Euro 0.6 million compared with Euro 3.4 million at March 31, 2019.
Investing activitiesabsorbed Euro 3 million, consisting solely of infrastructure investments, compared to positive cash flows of Euro 9.7 million generated in the first quarter of 2019 by the maturity of temporary investments of liquidity of Euro 13.4 million.
Finally, financing activities absorbed cash flowsof Euro 0.06 million, due solely to the settlement of finance lease liabilities.
Consequently, the change in closing cash flowin the period indicates the use of Euro 2.4 million, against generation of cash of Euro 12.8 million in the first quarter of 2019.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
The Group's net financial position at March 31, 2020, compared to December 31, 2019 and March 31, 2019, is presented below:
As at | As at | As at | Change | Change | ||||||||||
in thousands of Euro | 31.03.2020 | 31.03.2020 | ||||||||||||
31.03.2020 | 31.12.2019 | 31.03.2019 | ||||||||||||
31.12.2019 | 31.03.2019 | |||||||||||||
A | Cash | 24 | 26 | 25 | (2) | (1) | ||||||||
B | Other cash equivalents | 26,793 | 29,227 | 28,538 | (2,434) | (1,745) | ||||||||
C | Securities held for trading | 0 | 0 | 0 | 0 | 0 | ||||||||
D | Liquidity (A)+(B)+(C) | 26,817 | 29,253 | 28,563 | (2,436) | (1,746) | ||||||||
E | Current financial receivables | 501 | 501 | 75 | 0 | 426 | ||||||||
F | Current bank debt | (115) | (28) | (144) | (87) | 29 | ||||||||
G | Current portion of non-current debt | (3,194) | (3,059) | (4,434) | (135) | 1,240 | ||||||||
H | Other current financial debt | (1,517) | (3,086) | (2,323) | 1,569 | 806 | ||||||||
I | Current financial debt (F)+(G)+(H) | (4,826) | (6,173) | (6,901) | 1,347 | 2,075 | ||||||||
J | Net current financial position (I)-(E)-(D) | 22,492 | 23,581 | 21,737 | (1,089) | 755 | ||||||||
K | Non-current bank debt | (11,518) | (11,643) | (14,567) | 125 | 3,049 | ||||||||
L | Bonds issued | 0 | 0 | 0 | 0 | 0 | ||||||||
M | Other non-current liabilities | (1,322) | (1,437) | (1,742) | 115 | 420 | ||||||||
N | Non-current financial debt (K)+(L)+(M) | (12,840) | (13,080) | (16,309) | 240 | 3,469 | ||||||||
O | Net financial position (J)+(N) | 9,652 | 10,501 | 5,428 | (849) | 4,224 | ||||||||
The Group Net Financial Positionat March 31, 2020 was a cash position of Euro 9.6 million, compared to Euro 10.5 million at December 31, 2019 (-Euro 0.8 million) and Euro 5.4 million at March 31, 2019 (+Euro 4.2 million).
Compared with the first quarter of 2019, the improvement is due to the collection of financial assets that were classified as non-current financial assets at March 31, 2019 as temporary uses of liquidity maturing after 12 months.
The decrease compared to December 31, 2019 is due to the reduction in cash and cash equivalents, both due to a typically seasonal effect with the payment of the concession fee in the second half of 2019 and to the reduction in receipts resulting from the drop in turnover.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
3.3 FINANCIAL POSITION ANALYSIS
The Group financial position, classified according to "sources" and "uses", is presented below:
USES | As at | As at | As at | Change | Change | |||||||||||||||
31.03.2020 | 31.03.2020 | |||||||||||||||||||
in thousands of Euro | 31.03.2020 | 31.12.2019 | 31.03.2019 | |||||||||||||||||
31.12.2019 | 31.03.2019 | |||||||||||||||||||
- Trade receivables | 12,341 | 15,464 | 16,289 | (3,123) | (3,948) | |||||||||||||||
- Tax receivables | 629 | 189 | 348 | 440 | 281 | |||||||||||||||
- Other Receivables | 5,840 | 5,014 | 5,718 | 826 | 122 | |||||||||||||||
- Inventories | 641 | 622 | 559 | 19 | 82 | |||||||||||||||
Sub-total | 19,451 | 21,289 | 22,914 | (1,838) | (3,463) | |||||||||||||||
- Trade payables | (15,408) | (18,537) | (17,131) | 3,129 | 1,723 | |||||||||||||||
- Tax payables | (4,055) | (3,598) | (3,360) | (457) | (695) | |||||||||||||||
- Other payables | (27,395) | (27,514) | (25,472) | 119 | (1,923) | |||||||||||||||
Sub-total | (46,858) | (49,649) | (45,963) | 2,791 | (895) | |||||||||||||||
Net operating working capital | (27,407) | (28,360) | (23,049) | 953 | (4,358) | |||||||||||||||
Fixed assets | 198,686 | 198,143 | 192,080 | 543 | 6,606 | |||||||||||||||
- Deferred tax assets | 6,276 | 6,190 | 6,061 | 86 | 215 | |||||||||||||||
- Other non-current assets | 13,630 | 13,624 | 17,721 | 6 | (4,091) | |||||||||||||||
Total fixed assets | 218,592 | 217,957 | 215,862 | 635 | 2,730 | |||||||||||||||
- Provisions for risks, charges & | (19,469) | (19,229) | (18,345) | (240) | (1,124) | |||||||||||||||
severance | ||||||||||||||||||||
- Deferred tax liabilities | (2,573) | (2,558) | (2,471) | (15) | (102) | |||||||||||||||
- Other non-current liabilities | 0 | (136) | (168) | 136 | 168 | |||||||||||||||
Sub-total | (22,042) | (21,923) | (20,984) | (119) | (1,058) | |||||||||||||||
Fixed Operating Capital | 196,550 | 196,034 | 194,878 | 516 | 1,672 | |||||||||||||||
Total Uses | 169,143 | 167,674 | 171,829 | 1,469 | (2,686) | |||||||||||||||
SOURCES | As at | As at | As at | Change | Change | |||||||||||||||
31.03.2020 | 31.03.2020 | |||||||||||||||||||
in thousands of Euro | 31.03.2020 | 31.12.2019 | 31.03.2019 | |||||||||||||||||
31.12.2019 | 31.03.2019 | |||||||||||||||||||
Net Financial Position | 9,652 | 10,501 | 5,428 | (849) | 4,224 | |||||||||||||||
- Share Capital | (90,314) | (90,314) | (90,314) | 0 | 0 | |||||||||||||||
- Reserves | (87,862) | (67,009) | (83,396) | (20,853) | (4,466) | |||||||||||||||
- Result for the period | (619) | (20,852) | (3,547) | 20,233 | 2,928 | |||||||||||||||
Group Shareholders' equity | (178,795) | (178,175) | (177,257) | (620) | (1,538) | |||||||||||||||
Minority Interests | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Total Shareholders' Equity | (178,795) | (178,175) | (177,257) | (620) | (1,538) | |||||||||||||||
Total Sources | (169,143) | (167,674) | (171,829) | (1,469) | 2,686 | |||||||||||||||
The Group's equity structure as at March 31, 2020 reported negative net operating working capitalof Euro
27.4 million, compared to Euro 28.4 million at the end of 2019 due to a reduction in payables - mainly trade payables - greater than the reduction in receivables and other current assets.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Compared to the first quarter of 2019, net operating working capital (-Euro 23 million) reported an increase of over Euro 4 million, mainly due to the significant reduction in receivables and other current assets, including passenger boarding fee surtaxes.
There were no particular changes in fixed operating capitalof Euro 196 million compared with December 31, 2019, while the increase with respect to March 31, 2019 (Euro 194.9 million) is due to the progress made in the Group's investment plan, net of the divestment of cash and cash equivalents due beyond one year.
At March 31, 2020, Consolidated and Group Shareholders' Equityamounts to Euro 178.8 million, against a net financial positionof Euro 9.6 million.
The Parent Company Shareholders' Meeting of April 30, 2020, in addition to approving the 2019 Financial Statements, accepted the prudent approach proposed by the Board of Directors to support the capital base and limit the economic impact of COVID-19, resolving to fully allocate the 2019 net profit to reserves.
3.4 INDICATORS
The Directors deemed the Group's major income statement and statement of financial position indicators at and for the period ended March 31, 2020 to be immaterial due to their interim nature.
3.5 INVESTMENTS
Investments totalled Euro 3.0 million in Q1 2020, of which approx. Euro 1.2 million for Masterplan investments and the remainder on airport operations.
The state of progress of the main investments in the Masterplan is illustrated below:
- Cargo building: construction work commenced on a specialist operators dedicated building; work at the site was suspended on March 22 following provisions related to COVID-19, and restarted on May 4 2020.
- Newde-icingapron and building: construction of the de-icing apron and building concluded in 2019, some minor/ancillary activities are currently underway to complete the project;
- Raised area of the Express car park:the design of the Express Parking extension concluded and construction works are pending;
- Terminal expansion:the executive design phase of the existing terminal extension was concluded and the review of the executive design was successfully completed at the end of January 2020, the executive project has been sent to ENAC for approval;
- NewMulti-storycar park: the design of the parking lot close to the terminal concluded; approval of the project by ENAC is pending.
Further to the Masterplan investments, others focused on airport operations and the improvement of the service offered to passengers, in addition to boosting the efficiency of company processes. In particular, we highlight:
- the supply of three new legally compliantx-ray machines, and the related expansion of the BHS system;
- various IT interventions;
- installation of a newlow-voltage electrical panel to power the terminal.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Provisions for renewal
The total works for the realisation of the cyclical renewal and maintenance of the airport infrastructure and plant at March 31, 2020 amount to Euro 145 thousand.
3.6 PERSONNEL Workforce breakdown
for the quarter ended | for the quarter ended | Change | % Change | ||||||||
31.03.2020 | 31.03.2019 | ||||||||||
Full Time Equivalent average workforce | 472 | 477 | -5 | -1% | |||||||
Executives | 9 | 10 | (1) | -10% | |||||||
Managers | 34 | 31 | 3 | 10% | |||||||
White-collar | 338 | 338 | 0 | 0% | |||||||
Blue-collar | 91 | 98 | (7) | -7% | |||||||
for the quarter ended | for the quarter ended | Change | % Change | ||||||||
31.03.2020 | 31.03.2019 | ||||||||||
Average workforce | 536 | 531 | 5 | 1% | |||||||
Executives | 9 | 10 | (1) | -10% | |||||||
Managers | 34 | 31 | 3 | 10% | |||||||
White-collar | 398 | 388 | 10 | 3% | |||||||
Blue-collar | 95 | 102 | (7) | -7% |
Source: Company workings
The workforce has decreased by five full-time employees compared to Q1 2019. This is due to the recruitment of fewer resources in operational areas (security and terminals), which tend to be more closely linked to traffic trends.
Costs
In addition to the drop in staff numbers mentioned above, the Group has reduced its costs by 8.5% compared to the same period in 2019 by taking actions to limit labour costs, given that they represent one of the Group's primary expenses. Current employment levels have however been maintained.
In particular, action was taken to block overtime and to encourage employees to take accrued holidays. In addition, on March 21, 2020, AdB launched an Extraordinary Redundancy Fund for all employees, maintaining only the operational services deemed essential, resulting in a significant reduction in the activities of other employees.
for the quarter ended | for the quarter ended | Change | % Change | |||||||
31.03.2020 | 31.03.2019 | |||||||||
Personnel costs | 6,537 | 7,145 | -608 | -8.5% | ||||||
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
TRADE UNION RELATIONS
An agreement for the AdB employee Extraordinary Redundancy Fund was signed by trade unions on March 19, 2020, with the Emilia Romagna Region issuing a favourable opinion. The Redundancy Fund may be in place for up to 12 months, and provides for a rotational system based on interchangeable job roles, in line with a set of criteria that guarantee fairness.
TRAINING OF PERSONNEL
Spending on employee training was lower in Q1 2020 compared to the same time last year due to the suspension, from mid-March, of internal and external training courses following ministerial provisions related to the COVID-19 pandemic.
All non-compulsory training activities were cancelled at the end of February in order to contain costs.
4 MAIN NON-FINANCIAL RESULTS
4.1 QUALITY
Q1 of 2020 delivered some very positive quality results, improving on this time last year. Quantitative and qualitative surveys were correctly carried out, despite the ongoing health emergency. The current emergency, and the consequent reduction in traffic, has had a positive effect on some quality indicators, despite the complex operating environment.
Improved quality performance continued into Q1 of 2020, confirming Bologna Airport's ability to meet passenger expectations throughout the passenger journey. The elements that most contributed to satisfaction levels were passenger information, way finding, security control processes, and the courtesy and professionalism of staff during security checks, for example.
Key Quality Indicators | Q1 2020 | Q1 2019 | ||||||||
Overall satisfaction | % of satisfied passengers | 99.9% | 98.9% | |||||||
Service regularity and speed | % of satisfied passengers | 98.8% | 98.7% | |||||||
General cleaning level perception | % of satisfied passengers | 99.9% | 96.3% | |||||||
Toilet cleanliness and functionality level | % of satisfied passengers | 98.1% | 90.2% | |||||||
perception | ||||||||||
Check-in queue waiting | Time in 90% of cases | 7'57'' | 11'48'' | |||||||
Waiting time for baggage screening control | Time in 90% of cases | 4'51'' | 5'08'' | |||||||
First/last bag return time from aircraft block-on | First bag (time in 90% of cases) | 21'59'' | 23'00'' | |||||||
(from system) | Last bag (time in 90% of cases) | 28'59'' | 30'00'' | |||||||
Source: Company workings
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Also within the framework of the Airport Service Quality programme of ACI World, Bologna maintained its satisfaction levels. Overall satisfaction was in fact excellent (3.85), improving on the same period of the previous year (3.80).
5 REGULATORY FRAMEWORK
5.1 REGULATORY AGREEMENT AND NEW TARIFF DYNAMIC 2020-2023
2020 represents the first year of the new 2020-2023 regulatory period. The parent company initiated in 2019 preliminary activities with ENAC for the drafting of the Regulatory Agreement for the 2020-2023 four- year period and with the Transport Regulation Authority (TRA), for the calculation of the airport "tariffs" for the same four-year period.
On January 16, 2020, the Transport Regulation Authority passed and published the resolution definitively approving the tariff model of reference with regard to the proposed airport fees submitted by AdB.
It should be noted that, following the suspension of deadlines for administrative proceedings established by the emergency health regulations (see below), the deadline to review the new ART tariff models has been extended from March 12, 2020 to July 31, 2020.
5.2 EMERGENCY HEALTH REGULATIONS (COVID-19 PANDEMIC) AND THEIR IMPACT ON AIRPORT MANAGEMENT
Pursuant to Article 107 of the EU Treaty, the global spread of COVID-19 has been defined by Italy's emergency health legislation as an exceptional and unforeseeable event ("force majeure"), resulting in serious economic upheaval. The pandemic has had a significant, direct impact on the air sector following the grounding of international flights, the closure of many national airspaces and the implementation of social containment measures by the Italian Government, which have limited movement and resulted in the closure of commercial establishments, including those in airport terminals. The resulting medium-term outlook is therefore very pessimistic, taking into account the significant drop in traffic followed by the near zeroing of air travel since mid-March 2020. The sector has also seen a reduction in the revenues of airport management companies, which have yet to benefit from specific support measures. The only support measure, announced in the Enac press release of April 23, 2020 regarding the suspension of the payment of the airport concession fee, to support the sector's restart, commensurate with the actual 2020 traffic and a payment deadline of January 31, 2021, was formalized by the Enac measure of May 11, 2020, although which appears at the moment to be unclear and difficult to interpret.
Bologna Airport features on a list accompanying Ministerial Decree 112 of March 12, 2020, which limits the operation of Italian airports. An ENAC memo issued on March 13 designates Bologna Airport as a key operating airport for central and northern Italy, and a means of guaranteeing essential air transport services to the public.
In light of the regulatory uncertainty and the complex nature of forecasts relating to the recommencement of air traffic, the Company has taken all possible measures to reduce its operating costs, while tackling all non-routine costs needed to keep the airport running, and to guarantee the safety of staff members and airport activities.
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5.3 FIRE PREVENTION FUND
Article 1, paragraph 1328, of Law No. 296 of December 27, 2006 (2007 Finance Law) requires the payment by Italian airport management companies of an amount, to be calculated proportionally to its airline traffic, in order to lower the cost to the State for the provision of fire prevention services (so-called Fire Prevention Fund). This purpose was modified by Article 4, paragraph 3-bisof Law Decree No. 185/2008, entering into force on January 29, 2009, which separated the relationship between those required to fund the so-called Fire Prevention Fund and the benefit deriving from the activity financed, allocating the Fund to differing purposes than its original scope related to airport fire prevention services.
Following the entry into force, from January 1, 2016 of Article 1, paragraph 478, of Law No. 208 of December 28, 2015 implementing "Provisions for the drawing up of annual and multi-year budgets of the State" (2016 Stability Law), the Legislature, through Law Decree No. 159 of October 1, 2007 converted with modifications by Law No. 222 of November 29, 2007, introduced the qualification of "payments", with reference to the contributions allocated to the Fire Prevention Fund. This latter was subject to a constitution legality opinion, following the deferral by the Court of Cassation, through reasoned ordinance issued on December 28, 2016. From July 26, 2018, as per Article 30 of Law No. 87 of 1953, the challenged provision of Article 1, paragraph 478 of Law No. 208 of December 28, 2015, declared illegal, with the Constitutional Court order No. 167/2018, may no longer be applied.
Within the judicial framework we must also mention the important judgement of the Court of Cassation of February 1, 2019, No. 3162, which outlines a definitive framework encompassing the complex Fire Prevention Fund, in which the following was definitively ascertained and declared:
- the nature of the tax contribution to be paid;
- the competent tax jurisdiction.
This pronouncement of the Cassation recalls, in addition, with particular importance from a general judicial principle viewpoint, the ruling handed down by the Rome Provincial Tax Commission No. 10137/51/14, which ascertained the "non-obligation to pay the tax from 2009, due to the non-applicability of its original legislative purpose as per Article 4, paragraph 3-bisof Legislative Decree No. 185 of 2008".
Finally, in 2019 the Regional Tax Commission of Lazio rendered judgment no. 7164/2019 which, after reviewing all the facts and legal arguments examined by the various courts (Constitutional Court, Court of Cassation, Provincial Tax Commission, etc.), lays down a thorough legal basis and sets out the tax case law on the treatment of the Fire Prevention Fund.
An appeal of this ruling by the administrations and State's Attorney is currently pending before the Court of Cassation.
For further details, reference should be made to the Disputes section.
5.4 BOARDING FEE MUNICIPAL SURTAX TO BE ALLOCATED TO INPS
Article 26 of Legislative Decree No. 4/2019 (Air transport and airport system solidarity fund), converted with amendments by Law No. 26/2019, postpones to January 1, 2020 the transfer to the INPS (management of assistance) of the Euro 3 portion of the municipal boarding fees surtax (as per Article 6- quater, paragraph 2 of Legislative Decree 7/2005), contributed until December 31, 2018 to the Solidarity Fund for the air transport sector and the airport system.
5.5 NEW "TERMINAL VALUE" REGULATION.
Following the entry into force of the amended Article 703 of the Italian Navigation Code, as updated by Article15-quinquies,paragraph 1 of Legislative Decree No. 148 of October 16, 2017, converted, with amendments, by Law No. 172 of December 4, 2017, the Parent Company has examined various aspects, from both a legal and an accounting and financial reporting standpoint, and has obtained a specific legal opinion establishing that, in view of the concession agreement with ENAC, the provisions on the value of succession, reimbursements and indemnities apply in full. Consequently, it applied for the first time the
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Terminal Value regulation in the 2019 financial statements, which may be consulted for all further information.
5.6 NON-FINANCIAL INFORMATION REPORT
The Group in accordance with Article 5, paragraph 3, letter b of Legislative Decree 254/2016 has drawn up for the second year the consolidated disclosure of non-financial information as a separate report. The 2019 consolidated disclosure of non-financial information, drawn up as per the "GRI Standards", is available on the Group website.
5.7 PRIVACY COMPLIANCE
The Parent Company implemented on May 25, 2018 a specific model in order to ensure adequate compliance with European Regulation No. 679/2016 (GDPR - General Data Protection Regulation) - and the necessary adjustment of the organisation, processes, company deeds and procedures. The model is implemented and developed in accordance with the principles outlined in the GDPR of privacy by design and privacy by default through a dedicated inter-departmental body (Data Protection Committee) comprising internal specialist personnel. The Company periodically updates its Register of processing operations and risk analysis in order to adopt adequate security measures. Periodic audits are undertaken to ensure correct compliance with legislation by the DPO team. The Company renewed the appointment of its Data Protection Officer (DPO) until 2022.
5.8 CONTINUITY OF SERVICES PROVIDED BY ALITALIA IN EXTRAORDINARY ADMINISTRATION
By order of the Ministry of Economic Development of May 2, 2017, published in edition No. 104 of Italy's Official Gazette dated May 6, 2017, Alitalia - Società Aerea Italiana S.p.A was admitted to the extraordinary administration procedure, with immediate effect and three Extraordinary Commissioners were appointed. The Court of Civitavecchia declared Alitalia - Società Aerea Italiana S.p.A. in extraordinary administration ("Alitalia SAI in EA") insolvent by judgment of May 11, 2017. The decree of the Ministry of Economic Development of May 12, 2017 was then published in edition no. 124 of the Official Gazette of May 30, 2017, also admitting Alitalia Cityliner S.p.A. to the extraordinary administration procedure and appointing the same panel of commissioners as for Alitalia.
The Parent Company, as part of the extraordinary administration procedure, in a timely manner raised the receivable matured to May 2, 2017 of Euro 0.78 million, of which Euro 0.66 million requested in preference form as per Article 1023 No. 1 of the navigation code, and Euro 0.12 million as unsecured. At the statement of liabilities hearing fixed for February 6, 2018, only the receivables of employees were examined. For the examination of the various receivables, after various postponements, the hearing was fixed for February 20, 2019, but this date was again postponed for a date to be determined.
At present, the total amount of the liabilities of Alitalia SAI admitted to the extraordinary administration procedure have yet to be formally established.
Finally, the tenth statement of liabilities, including the claim lodged by the Parent Company, was filed on December 17, 2019. At this juncture, full priority was granted to the airport fees accrued in the final months of operation prior to the declaration of insolvency, amounting to Euro 0.66 million.
However, it should be noted that, on the basis of the emergency health regulations mentioned above, a potential avenue to re-nationalise the airline has been explored. In fact, while failed attempts were being made to privatise the airline, the Italian government made recourse to Article 107(2)b - through the provisions of Article 79(2) of the "Italian Healthcare" Decree (Leg. Decree No. 18 of March 17, 2020) - in order to bring the new Alitalia airline under public control for Euro 500 million, without going against the EU ban on state aid, given the exceptional event that has occurred. However, said potential recapitalisation is subject to authorisation by the European Commission. As such, the establishment of an Alitalia newco is on the horizon, either as a 100% state-controlled entity, or under the public control of the Ministry for the Economy and Finance, with ample powers awarded to the Extraordinary Commissioner to distribute the
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assets owned by the two companies in extraordinary administration. This situation further complicates the outcome of AdB's filing of claims in the bankruptcy proceedings.
5.9 IRESA
The IRESA - regional tax on airplane noise emissions - was instigated as a tax by the Emilia-Romagna Region through Regional Law No. 15 of December 21, 2012. The regulation was subsequently suspended for an undetermined period by Regional Law No. 28 of December 20, 2013. On June 27, 2019, Regional Law No. 8 introduced amendments to the law setting up the IRESA, establishing application from January 1, 2020and amending the assessable base of the tax, which is no longer calculated only on the basis of the maximum take-off weight (MTOW) and the level of aircraft sound emissions, but also by considering the day/night- time bracket of the movement, the type of propulsion (propeller or jet) and the aircraft's take-off and landing direction; this latter parameter for application of the levy - which is very complex and not currently available to the airport manager - is still being defined and requires a subsequent motion of the Regional Council.
Airlines are liable for IRESA with effect from January 1, 2020, per the terms in the accounting document issued by the airport manager, which then pays the sums in question to the Emilia Romagna Region in the manner established in a specific agreement approved by Regional Council Motion Resolution No. 2410 of December 19, 2019. The funds shall be allocated, net of the above-mentioned convention costs, to the completion of the acoustic monitoring system and acoustic anti-pollution, in addition to further investments and/or indemnities for the residents in zones A and B in the airport's surrounding area as defined by the Environmental Ministry Decree of October 31, 1997. In light of the national health emergency, Emilia-RomagnaRegional Council Resolution No. 402/2020 establishes the postponement until July 31, 2020 of tax compliance measures relating to the sending of information flows and IRESA payments by airport managers.
5.10 BREXIT
On May 24, 2019, Law No. 41 of May 20, 2019 converting Legislative Decree No. 22 of May 25, 2019, was published in the Official Gazette of 24/05/2019, regarding urgent measures to ensure security, financial stability and market integrity, and to protect the health and freedom of movement of citizens of Italy and the United Kingdom in the event of the withdrawal of the latter from the European Union" (the "Brexit Decree").
Article 17-ter, in introducing provisions on airport tariffs, requires that EU airport charges will continue to apply to passengers travelling from Italian airports to the United Kingdom, on the condition of reciprocity, from the date of Brexit up to the date of entry into force of a global agreement governing the provision of transport services with the United Kingdom, or, failing that, until 30/03/2020.
Thereafter, on January 29, 2020, the European Parliament ratified the text of the agreement on the withdrawal of the United Kingdom from the European Union, which officially took place on February 1, 2020. This agreement governs Britain's withdrawal, establishing a further transitional period from February 1 to December 31, 2020in which everything remains unchanged, including the collection of airport fees. The EU regulations and procedures on the free circulation of persons, services, capital and goods will remain in effect in the United Kingdom and only with effect from January 1, 2021, barring a new agreement to the contrary, will the United Kingdom no longer be a part of the European Union customs and tax (VAT and excise) territory.
6 DISPUTES
This section outlines the main - fundamental in financial terms - disputes and/or those which in the period saw significant legal and/or non-legal developments, without therefore providing an exhaustive outline of all positions for which specific amounts have been allocated to the disputes risk provision.
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Fire Prevention Fund
In relation to the contribution to the Fund set up by the 2007 Finance Act in order to reduce the cost to the State for the organisation and provision of the fire prevention serviceat Italian airports, the Parent Company promoted, in 2012, a specific judicial action before the Rome Civil Tax Court, substantially requesting the Judge to ascertain and declare the cessation of the obligatory contribution following the change in the purpose of the afore-mentioned Fund, i.e. from January 1, 2009. In fact, from that date the resources accumulated in the Fund were allocated to the generic requirements of the public purse and civil defence, as well as for financing salary increases of the Fire Prevention Service.
Currently the Rome Court, following a series of postponements and suspensions deriving from the systematic reassignment of the case to different judges, has not outlined its conclusions and the next hearing is currently fixed for October 28, 2020. However, with the existence, over the years, of a consolidated jurisprudence (ex pluris Rome Provincial Tax Court No. 10137/51/2014 - passed into Law - and Rome Provincial Tax Court No. 2517/2019) sealed by the pronouncement of the Court of Cassation No. 3162 of February 1, 2019 and, latterly, by the Lazio Regional Tax Commission No. 7164/2019, which affirmed: i) the nature of the contribution to the Fire Prevention Fund, ii) the consequent competent tax jurisdiction, iii) the non-obligation to pay the tax from 2009, due to the non-applicability of its original legislative purpose, the Company is awaiting a definitive pronunciation of non-competence by the civil judge.
In relation to the above-mentioned civil case, promoted by the Company before the Rome Court, the Tax Administrations notified however on January 16, 2015 an injunctive decree relating to the presumed contribution to the Fire Prevention Fund for the years 2007, 2008, 2009 and 2010. This decree, containing clear material and formal errors, was immediately opposed, requesting the cancellation of the decree or, in replacement, to declare upon its jurisdiction and to order the reinstatement of the case before the Rome Court. On December 20, 2017, the Bologna Court issued a jurisdiction ordinance, declaring the Tax Commission as the competent judge, which cancelled Injunction Decree No. 20278/14. Unexpectedly and incomprehensively, on May 24, 2018, the State District Lawyer notified an appeal against the ordinance of the Bologna Court of December 20, 2017.
The Company therefore appealed (RG No. 2020/18), fully outlining its defence and invoking, preliminarily, the clear lack of jurisdiction of the Bologna Court. The appeal was definitively rejected as inadmissible by the Bologna Court of Appeal in judgment no. 1718/19. This judgment became res judicataon October 28, 2019, definitively ending the dispute initiated by the administrations, which, additionally, were ordered to reimburse AdB in full for all legal costs incurred.
The company in order to obtain a direct recognition of the principles embodied universally by the Court of Cassation and by the Rome Provincial Tax Court will present its case before the tax judge, once proceedings may take place, of the cases currently before the Rome Court (RG No. 22375/12). In parallel, in January 2020 a series of discussions were held with the administrations of a possible settlement and promotion of rewriting the statute that changed the Fund's initial purpose. There are no significant developments to report; ENAC has invited airport management companies to continue to adopt as prudential an approach as possible, above all with regard to the sums contributed to the Fire Service Fund subject to tariff coverage.
Accordingly, at present there are no new judicial - in absence of judgments directly applicable to AdB - or extrajudicial issues, such as to result in a change in the treatment in the financial statements of the contribution to the Fire Protection Fund.
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Alitalia - Revocatory Action
At the beginning of May 2020, the Company received notification of the revocatory action submitted by the Extraordinary Commissioner of ALITALIA SAI in limited partnership. As such, Alitalia is essentially rescinding its application to file for bankruptcy by submitting a request to the court to render it ineffective. As a consequence, Alitalia would obtain a refund of any payments made during the "suspect period," i.e. the six months before bankruptcy was declared (November 1, 2016 - May 1, 2017), starting on the date the company entered into extraordinary administration.
The first hearing is scheduled for February 22, 2021. While challenging its legal basis and condemning the timing of such an action, the Company will launch an appropriate legal defence to effectively oppose the rescindment.
Out-of-court dispute- TE2C design company reserves
The Parent Company received a request for higher compensation from Tecno Engineering 2C, an engineering company tasked with designing the Group's "terminal expansion" project, which amounts to approximately Euro 2.2 million. The Company does not consider the contractual counterparty's request to be legitimate, and is carrying out preliminary investigations, in addition to those that have already been completed, in order to present an adequate counter appeal and rejection - for multiple reasons - of the request as received.
7 MAIN RISKS AND UNCERTAINTIES
Risks relating to the COVID-19 pandemic
The COVID-19 health emergency is having a significant impact on the airport sector. According to data released by ACI Europe, European airports lost 235 million passengers between March 1 and April 19, 2020 alone. According to estimates by ACI Europe, the impact of the pandemic in 2020 is expected to be 14 times greater than that of the previous global financial crisis, translating into a drastic drop in profitability and the financial resources required for business operations.
The pandemic's long-term impact on the air transport sector remains difficult to quantify, even if it is possible to make radical changes to current business models. Furthermore, passenger traffic might be impacted beyond 2020, considering the "psychological" effect the emergency has had on people's propensity to travel by plane, as well as the maintenance or further tightening of restrictive traffic measures on domestic and international flights, and geographical areas, and the maintenance or further tightening of health protection measures ("social distancing"), which significantly reduces the capacity of airport infrastructures.
A medium-to-long-term reduction in traffic could risk undermining the sustainability of business models, and may influence the airport's infrastructure development plan.
Taking into account the and uncertainties deriving from the developing pandemic, the areas listed below may be affected by these issues.
In accordance with the disclosure requirements set out in Article 2428(2), No. 6-bis of the Italian Civil Code, the Group holds financial instruments that qualify as significant in quantitative terms. However, considering the criteria that inform its choice of investments, such as:
- minimising the risk of the return of invested capital;
- the differentiation of the credit institutions;
- the duration, normally less than two years;
- the return offered;
the Group believes the financial risks- understood as the risks of changes in the value of the financial instruments - to be limited.
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The Group is not subject to foreign exchange risksince it does not undertake transactions in foreign currencies.
In view of the significant commitments to infrastructure development, liquidity riskcould manifest as difficulty in obtaining timely, cost-effective financing. While the Group's commitment to develop existing airport infrastructures remains unchanged, its operations plan is currently undergoing strategic reassessment following the drastic reduction in traffic. Due to the current extraordinary financial crisis, the need to finance the Net Working Capital cycle must also be taken into consideration with regard to the operations plan, which has nevertheless been pared down and remodelled. The Parent Company is working to obtain access to credit lines and bank loans in order to fund the Group's financial needs, given the publication of the Liquidity Decree of April 9, 2020. Discussions are currently underway with the issuing credit institution with regard to a failure to comply with mortgage covenants due to worsening margins as the current crisis progresses.
Furthermore, in addition to approving the 2019 Financial Statements, the Parent Company Shareholders' Meeting of April 30, 2020 decided to allocate the 2019 profit entirely to reserves in order to maintain a solid capital base and to limit the economic impact of COVID-19.
The Group has sought to minimise interest rate risk, in view of its outstanding financing, by entering into both fixed-rate and floating-rate facilities.
Finally, the Group's credit riskis concentrated, in that 44% of its accounts receivable are claimed from its top ten clients. This risk is offset through specific trade payable management and control tools and procedures, in addition to adequate provisioning for doubtful accounts, according to the principles of prudency and in compliance with the accounting standards IFRS 15 and IFRS 9, which strengthens the ex- anteanalysis approach, rather than existing receivable recovery, in the credit risk assessment processes.
The commercial policies pursued by the Group to limit its exposure involve:
- requesting immediate payment for transactions with end consumers or occasional counterparties (i.e., parking areas);
- requesting advance payment from occasional airlines or airlines without an appropriate credit profile or collateral;
- requesting performance bonds fromsub-concessionaire clients.
The current economic crisis has increased the Group's credit risk due to the general lack of company liquidity; this increased risk has been factored into the doubtful debts provision as of March 31, 2020, and will be appropriately monitored and adjusted as events unfold in the coming months, and in line with the expected recovery time frame.
For further information on Group risks, please refer to the 2019 Directors' Report.
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8 ALTERNATIVE PERFORMANCE INDICATORS
In this Directors' Report, various performance indicators are presented in order to permit a better assessment of operating performance and financial position.
On December 3, 2015, Consob published Communication No. 92543/15, rendering applicable the Guidelines issued on October 5, 2015 by the European Security and Markets Authority (ESMA) regarding the presentation of such indicators in regulated information circulated or financial statements published on or after July 3, 2016. These Guidelines, updating the previous CESR Recommendation (CESR/05-178b), seek to promote the utility and transparency of alternative performance indicators included in regulated information or financial statements within the scope of application of Directive 2003/71/EC in order to improve their comparability, reliability and comprehensibility.
The criteria utilised for these indicators, in line with the above communications, are provided below:
- EBITDA:EBITDA (earnings before interest, taxation, depreciation and amortisation) is defined by management as the result before taxes for the year, financial income and charges, income and charges from equity investments, depreciation, amortisation and impairment. It therefore coincides, in this case, with the gross operating margin. EBITDA is not identified as an accounting measure as per IFRS and therefore should be considered as an alternative measure for the evaluation of the Group's performance. Since calculation of this indicator is not governed by the accounting standards that form the basis of preparation of the Group's Consolidated Financial Statements, the criterion used to determine and measure the indicator might not be uniform with that adopted by other groups. Accordingly, the figure in question might not be comparable with that presented by such other groups;
- Adjusted EBITDA:this is a measure used by the Group's management to monitor and assess the Group's operating and financial performance. It is calculated by subtracting from EBITDA the margin calculated as the difference between the Group's construction revenues and construction costs as the Airport's manager;
- Net Financial Position: the composition of net financial position is represented in accordance with the Consob Communication of July 28, 2006 and ESMA recommendation ESMA/2011/81.
9 GUARANTEES PROVIDED
The following table summarises the guarantees granted by the Group.
Euro thousands | As at 31/03/2020 | As at 31/03/2019 | Change | Change % |
Sureties | 8,163 | 7,573 | 591 | 7.8% |
Pledge on Equity Financial Instruments | 10,873 | 10,873 | 0 | 0% |
Patronage letters | 3,267 | 3,651 | (384) | -10.5% |
Total guarantees provided | 22,303 | 22,096 | 207 | 0.9% |
At March 31, 2020, the guarantees provided by the Group total Euro 22.3 million and principally concern: - sureties, mainly:
- to ENAC (the Italian Civil Aviation Authority) pursuant to the Full Management Agreement
(Euro 5.6 million);
- to the Bologna Customs Agency for various custom deposits of the subsidiary Fast Freight Marconi Spa totalling Euro 2.4 million.
- a pledge of the equity financial instrument issued by Marconi Express S.p.a. and subscribed for by the Parent Company for a nominal value of Euro 10.87 million, securing the obligations of Marconi Express to the credit institutions that financed the People Mover project;
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- a letter of patronage concerning the mortgage loan granted to the subsidiary Tag Bologna S.r.l. by Banca Agricola Mantovana (now Monte dei Paschi di Siena), equal to the residual principal, which at the end of the period amounted to Euro 3.3 million.
Inter-company and other related party transactions
Reference should be made to the specific paragraph of the Notes to the consolidated financial statements at March 31, 2020 for information concerning transactions undertaken during the period with subsidiaries, associates and related parties.
10 SUBSEQUENT EVENTS AND BUSINESS OUTLOOK
No events have occurred subsequent to period end that would require changes in terms of the presented performance or equity and financial position and that would therefore necessitate adjustments and/or additional disclosures in the financial statements.
However, some significant events occurred after the end of the period or are set to occur in the coming months.
Traffic performance
Only one flight was running to Rome Fiumicino in April 2020, operated by Alitalia. The flight took off on a daily basis in the first half of April, and every two days in the second half of the month, with a consequent drop in traffic of around 99.8% compared to April 2019.
Overall, a total of 1,396,034 passengers travelled by plane in the first four months of 2020 - a reduction of around 49% compared to 2019.
Operating and financial performance and business outlook
Uncertainty surrounding the duration and future evolution of the current health emergency makes it difficult to predict traffic trends and the Group's economic and financial situation in the coming months. Financial results are likely to worsen further in Q2 of 2020, given the substantial lack of flights in April and May, and a flight schedule that has yet to be determined for June.
The Group's main customer, Ryanair, has stated that it plans to resume flights in the July-September 2020 quarter. Ryanair tickets are now on sale, with flights scheduled to depart Bologna Airport from the end of June. Volotea has announced a new connection to Olbia starting on July 3, while KLM also expects to restart operations at the beginning of July. Several companies, including Air France, Lufthansa and British Airways, have hinted at the partial relaunch of operations in June, while Emirates and Aeroflot currently state that flights from Bologna airport will only recommence in August. The above information is subject to change, given the frequent updates released by airlines. To summarise, at the time of this report, the time frame for initial traffic recovery is yet to be determined, and hints at only a partial recommencement of flights during the summer months.
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The outlook is equally uncertain for the non-aviation sector, and is characterised by the potential risk of lower revenues; in addition to a reduction in revenues from car parks and other passenger-related services
- includingsub-concession contracts covering various aviation and non-aviation airport operator areas and premises - discounts have been provided to operators whose activities have been most severely affected by the urgent decree, while payment extensions have been granted to customers whose activities have been, as mentioned, significantly impacted by the contingency plans still in place. Further discussions have taken place with clients in order to find a fair balance and to share the burden of the impact of external events, given that they are not the fault of any contractual parties, all while evaluating the prospects for a future - albeit gradual - recovery. The Group also intends to assess the legislative provisions of the "Relaunch Decree" in order to make use of all relevant assessment factors to establish discounts that are in line with the impact and duration of COVID-19, and in order to equally distribute the burden of the interim contingency plans.
With regard to costs, the Group immediately started reducing its outgoings by analysing existing contracts, renegotiating fairly with suppliers with a view to sharing the burden of contingency measures, and halting the purchase of non-strategic or unnecessary supplies during times when air traffic demand was in sharp decline. These activities will continue, as will the monitoring of results, with the assessment of further initiatives, and are expected to have an effect on the second quarter. However, given the structure of the income statement - which is typical of airport operators and contains a high number of fixed outgoings - these actions will only allow for savings that are not proportional to the decrease in sales.
With regard to employee costs, the actions put in place will mainly come into effect in April, as recourse to the Extraordinary Redundancy Fund was fairly modest in March, both because it was only implemented towards the end of the month and because other labour cost mitigation actions were used (blocking overtime, use of accrued holiday, etc.).
From a financial perspective the Group is currently reviewing the timing of its non-urgent investments, and the Parent Company is working to obtain access to credit lines and bank loans in order to fund the Group's financial needs, given the publication of the Liquidity Decree of April 9, 2020.
In addition to approving the 2019 Financial Statements, the Parent Company Shareholders' Meeting of April 30, 2020 agreed not to distribute dividends to shareholders and to allocate the 2019 profit entirely to reserves in order to maintain a solid capital base and to limit the economic impact of COVID-19.
Despite the mitigation actions outlined above, and taking into account the difficulties that come with estimating the economic impact of an event whose duration and scope are still unknown, the Group currently has reason to believe that the impact will be significant, especially in reference to the first half of this year.
Within this context, the Aeroporto G. Marconi di Bologna S.p.A. Group is paying the utmost attention to the safety of its passengers and employees in accordance with the regulations and best practices implemented by similar companies. The Group also intends to maintain current employment levels and to pursue its infrastructure development plans, with the aim of overcoming this emergency and re-igniting a phase of recovery and development for Bologna Airport that was abruptly interrupted by the pandemic.
The Chairman of the Board of Directors
(Enrico Postacchini)
Bologna, May 15, 2020
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 39 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Consolidated Financial Statements at March 31, 2020
Statement of Consolidated Financial Position Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Cash Flow Statement
Statement of changes in Consolidated Shareholders' Equity
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 40 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Statement of Consolidated Financial Position
in thousands of Euro | Note | As at | As at | ||||||
31.03.2020 | 31.12.2019 | ||||||||
Concession rights | 177,297 | 176,184 | |||||||
Other intangible assets | 2,222 | 2,276 | |||||||
Intangible assets | 1 | 179,519 | 178,460 | ||||||
Land, property, plant and equipment | 14,435 | 14,951 | |||||||
Investment property | 4,732 | 4,732 | |||||||
Tangible assets | 2 | 19,167 | 19,683 | ||||||
Investments | 3 | 44 | 44 | ||||||
Other non-current financial assets | 4 | 12,595 | 12,586 | ||||||
Deferred tax assets | 5 | 6,276 | 6,190 | ||||||
Other non-current assets | 6 | 991 | 994 | ||||||
Other non-current assets | 19,906 | 19,814 | |||||||
NON-CURRENT ASSETS | 218,592 | 217,957 | |||||||
Inventories | 7 | 641 | 622 | ||||||
Trade receivables | 8 | 12,341 | 15,464 | ||||||
Other current assets | 9 | 6,469 | 5,203 | ||||||
Current financial assets | 10 | 501 | 501 | ||||||
Cash and cash equivalents | 11 | 26,817 | 29,253 | ||||||
CURRENT ASSETS | 46,769 | 51,043 | |||||||
TOTAL ASSETS | 265,361 | 269,000 | |||||||
in thousands of Euro | Note | As at | As at | ||||||
31.03.2020 | 31.12.2019 | ||||||||
Share capital | 90,314 | 90,314 | |||||||
Reserves | 87,862 | 67,009 | |||||||
Profit for the period | 619 | 20,852 | |||||||
GROUP SHAREHOLDERS' EQUITY | 12 | 178,795 | 178,175 | ||||||
MINORITY INTERESTS | 12 | 0 | 0 | ||||||
TOTAL SHAREHOLDERS' EQUITY | 178,795 | 178,175 | |||||||
Severance and other personnel provisions | 13 | 4,241 | 4,257 | ||||||
Deferred tax liabilities | 14 | 2,573 | 2,558 | ||||||
Provision for renewal of airport infrastructure | 15 | 9,777 | 9,524 | ||||||
Provisions for risks and charges | 16 | 1,391 | 1,390 | ||||||
Non-current financial liabilities | 17 | 12,840 | 13,080 | ||||||
Other non-current liabilities | 0 | 136 | |||||||
NON-CURRENT LIABILITIES | 30,822 | 30,945 | |||||||
Trade payables | 18 | 15,408 | 18,537 | ||||||
Other liabilities | 19 | 31,450 | 31,112 | ||||||
Provision for renewal of airport infrastructure | 20 | 4,040 | 4,040 | ||||||
Provisions for risks and charges | 21 | 20 | 18 | ||||||
Current financial liabilities | 22 | 4,826 | 6,173 | ||||||
CURRENT LIABILITIES | 55,744 | 59,880 | |||||||
TOTAL LIABILITIES | 86,566 | 90,825 | |||||||
TOTAL SHAREHOLDERS' EQUITY & LIABILITIES | 265,361 | 269,000 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 41 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Consolidated Income Statement
for the quarter | for the quarter | |||
In thousands of Euro | Note | ended | ended | |
31.03.2020 | 31.03.2019 | |||
Revenues from aeronautical services | 9,906 | 13,400 | ||
Revenues from non-aeronautical services | 8,029 | 9,794 | ||
Revenues from construction services | 2,757 | 4,104 | ||
Other operating revenues and income | 119 | 191 | ||
Revenues | 23 | 20,811 | 27,489 | |
Consumables and goods | (508) | (425) | ||
Service costs | (4,730) | (5,013) | ||
Construction service costs | (2,625) | (3,908) | ||
Leases, rentals and other costs | (1,418) | (1,885) | ||
Other operating expenses | (794) | (765) | ||
Personnel costs | (6,537) | (7,145) | ||
Costs | 24 | (16,612) | (19,141) | |
Amortisation of concession rights | (1,643) | (1,500) | ||
Amortisation of other intangible assets | (302) | (273) | ||
Depreciation of tangible assets | (648) | (697) | ||
Depreciation, amortisation and impairment | 25 | (2,593) | (2,470) | |
Provisions for doubtful accounts | (225) | (25) | ||
Provision for renewal of airport infrastructure | (478) | (475) | ||
Provisions for other risks and charges | (4) | (94) | ||
Provisions for risks and charges | 26 | (707) | (594) | |
Total Costs | (19,912) | (22,205) | ||
Operating result | 899 | 5,284 | ||
Financial income | 27 | 94 | 39 | |
Financial expenses | 27 | (101) | (299) | |
Result before taxes | 892 | 5,024 | ||
Taxes for the period | 28 | (273) | (1,477) | |
Profit for the period | 619 | 3,547 | ||
Minority interest profit (loss) | 0 | 0 | ||
Group profit | 619 | 3,547 | ||
Undiluted earnings/(loss) per share (in Euro) | 0.02 | 0.10 | ||
Diluted earnings/(loss) per share (in Euro) | 0.02 | 0.10 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 42 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Consolidated Statement of Comprehensive Income
for the | for the | ||||||
in thousands of Euro | quarter | quarter | |||||
ended | ended | ||||||
31.03.2020 | 31.03.2019 | ||||||
Profit for the period (A) | 619 | 3,547 | |||||
Other profits (losses) that will be reclassified in the net result for the period | |||||||
Total other profits (losses) that will be reclassified in the net result for the period (B1) | 0 | 0 | |||||
Other profits (losses) that will not be reclassified in the net result for the period | |||||||
Actuarial profits (losses) on severance and other personnel provisions | 0 | 0 | |||||
Tax impact on actuarial profits (losses) on severance and other personnel provisions | 0 | 0 | |||||
Total other profits (losses) that will not be reclassified in the net result for the period (B2) | 0 | 0 | |||||
Total other profits (losses), net of taxes (B1 + B2) = B | 0 | 0 | |||||
Total profits, net of taxes (A + B) | 619 | 3,547 | |||||
of which Minority Interests | 0 | 0 | |||||
of which Group | 619 | 3,547 | |||||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 43 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Consolidated Cash Flow Statement
in thousands of Euro | As at 31.03.2020 | As at 31.03.2019 | |||||
Core income-generating operations | |||||||
Result for the period before taxes | 892 | 5,024 | |||||
Adjustments to items with no impact on cash and cash equivalents | |||||||
- Margin from construction services | (132) | (196) | |||||
+ Depreciation and amortisation | 2,593 | 2,470 | |||||
+ Provisions | 707 | 594 | |||||
+ Interest expense (income) for discounting and severance provisions | (74) | 173 | |||||
+/- Interest income and financial charges | 81 | 87 | |||||
+/- Losses/gains and other non-monetary costs/revenues | 33 | 0 | |||||
+/- Severance provisions and other personnel expenses | 20 | 33 | |||||
Cash flow generated/(absorbed) by operating activities before changes in working capital | 4,120 | 8,185 | |||||
Change in inventories | (19) | 35 | |||||
(Increase)/decrease in trade receivables | 2,881 | (2,042) | |||||
(Increase)/decrease in other receivables and current/non-current assets (non financial) | (1,249) | (1,391) | |||||
Increase/(decrease) in trade payables | (3,129) | (1,880) | |||||
Increase/(decrease) in other liabilities, various and financial | (1,765) | 806 | |||||
Interest paid | (2) | (18) | |||||
Interest collected | 2 | 2 | |||||
Taxes paid | 0 | 0 | |||||
Severance and other personnel provisions paid | (55) | (122) | |||||
Use of provisions | (145) | (214) | |||||
Cash flow generated / (absorbed) by net operating activities | 639 | 3,361 | |||||
Purchase tangible assets | (148) | (169) | |||||
Proceeds on sale of tangible assets | 3 | 0 | |||||
Purchases of intangible assets/concession rights | (2,873) | (3,571) | |||||
Proceeds on sale of intangible assets/concession rights | 0 | 0 | |||||
Purchase/capital increase of equity investments | 0 | 0 | |||||
Proceeds on sale of equity investments | 0 | 0 | |||||
Changes in current and non-current financial assets | 0 | 13,400 | |||||
Cash flow generated / (absorbed) by investment activities | (3,018) | 9,660 | |||||
Proceeds from the issuance of shares and other equity instruments | 0 | 0 | |||||
Dividends paid | 0 | 0 | |||||
Loans received | 0 | 0 | |||||
Loans repaid | 0 | (128) | |||||
Payments of leasing capital share | (57) | (92) | |||||
Cash flow generated / (absorbed) by financing activities | (57) | (220) | |||||
Change in closing cash flow | (2,436) | 12,801 | |||||
Cash and cash equivalents at beginning of period | 29,253 | 15,762 | |||||
Change in closing cash flow | (2,436) | 12,801 | |||||
Cash and cash equivalents at end of period | 26,817 | 28,563 | |||||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 44 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Statement of changes in Consolidated Shareholders' Equity
Share | Actuarial | Profits | Assets held- | Group | ||||||||||||||||||||||||
Share | Other | FTA | (losses) | for-sale | Profit (loss) | Minority | Shareholders' | |||||||||||||||||||||
in thousands of Euro | Premium | Legal Reserve | profits/(losses) | shareholders' | ||||||||||||||||||||||||
capital | Reserves | Reserve | Carried | reserve | for the year | interests | Equity | |||||||||||||||||||||
Reserve | reserve | Forward | equity | |||||||||||||||||||||||||
Shareholders' Equity as at 31.12.2018 | 90,314 | 25,683 | 6,310 | 36,437 | (3,272) | (821) | 1,132 | 0 | 17,927 | 173,710 | 0 | 173,710 | ||||||||||||||||
Allocation of the 2018 financial year result | 0 | 0 | 0 | 566 | 0 | 0 | 17,361 | 0 | (17,927) | 0 | 0 | 0 | ||||||||||||||||
Share capital increase | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
Assets held-for-sale | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
Total comprehensive profit (loss) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3,547 | 3,547 | 0 | 3,547 | ||||||||||||||||
Shareholders' Equity as at 31.03.2019 | 90,314 | 25,683 | 6,310 | 37,003 | (3,272) | (821) | 18,493 | 0 | 3,547 | 177,257 | 0 | 177,257 | ||||||||||||||||
Share | Actuarial | Profits | Assets held- | Profit (loss) | Group | |||||||||||||||||||||||
Share | Other | FTA | (losses) | for-sale | Minority | Shareholders' | ||||||||||||||||||||||
in thousands of Euro | Premium | Legal Reserve | profits/(losses) | for the | shareholders' | |||||||||||||||||||||||
capital | Reserves | Reserve | Carried | reserve | interests | Equity | ||||||||||||||||||||||
Reserve | reserve | Forward | period | equity | ||||||||||||||||||||||||
Shareholders' Equity as at 31.12.2019 | 90,314 | 25,683 | 7,170 | 37,029 | (3,272) | (988) | 1,387 | 0 | 20,852 | 178,175 | 0 | 178,175 | ||||||||||||||||
Allocation of the 2019 financial year result | 0 | 0 | 0 | 562 | 0 | 0 | 20,290 | 0 | (20,852) | 0 | 0 | 0 | ||||||||||||||||
Share capital increase | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
Assets held-for-sale | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
Total comprehensive profit (loss) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 619 | 619 | 0 | 619 | ||||||||||||||||
Shareholders' Equity as at 31.03.2020 | 90,314 | 25,683 | 7,170 | 37,591 | (3,272) | (988) | 21,677 | 0 | 619 | 178,795 | 0 | 178,795 | ||||||||||||||||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 45 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Notes to the consolidated financial statements
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 46 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Group activities
The Group operates in the airport management business. In particular:
- Aeroporto Guglielmo Marconi di Bologna S.p.A. (hereinafter "AdB" or the "Parent Company") is full manager of Bologna airport under Full Management Agreement No. 98 of July 12, 2004 and subsequent additional instruments, approved by Decree of the Ministry of Transport and Infrastructure and the Ministry of the Economy and Finance on March 15, 2006, with a term of 40 years from December 28, 2004. Its registered office is located at Via del Triumvirato 84, Bologna and it is registered with the Bologna Companies Register.
- Fast Freight Marconi S.p.A. (hereinafter FFM) operates in the cargo and mail handling business at Bologna airport. Its registered office is located at Via del Triumvirato 84, Bologna and it is registered with the Bologna Companies Register. It is subject to management and coordination by Aeroporto Guglielmo Marconi di Bologna S.p.A..
- TAG Bologna S.r.l. (hereinafter TAG) operates in the general aviation business as a handler and manager of the related infrastructure at the Bologna airport. Its registered office is located at Via del Triumvirato 84, Bologna and it is registered with the Bologna Companies Register. It is subject to management and coordination by Aeroporto Guglielmo Marconi di Bologna S.p.A..
Accounting standards adopted for the Preparation of the Consolidated interim financial statements as at March 31, 2020
Basis of preparation
The condensed consolidated interim financial statements of the Group (hereafter "the consolidated interim financial statements of the Group" or "consolidated financial statements") were prepared for the quarter ended March 31, 2020 and include the comparative figures for the year ended December 31, 2019, limited to the Consolidated Statement of Financial Position and the comparative figures for the January 1, 2019- March 31, 2019 quarter, limited to the Consolidated Income Statement, Consolidated Statement of Comprehensive Income and Consolidated Cash Flow Statement. The consolidated financial statements were prepared under the historic cost convention, except for financial assets held-for-sale, and Intangible Assets comprising Energy Certificates, which were recognised at fair value, and in accordance with the going concern principle. The Group considers that, although enduring a difficult economic and financial environment, no significant uncertainties exist (as defined by paragraph 25 of IAS 1) on the going concern.
The consolidated financial statements are presented in thousands of Euro, which is also the Group functional currency, and all amounts are rounded to the nearest thousands of Euro, where not otherwise indicated.
The publication of the consolidated interim financial statements of Aeroporto Guglielmo Marconi di Bologna S.p.A. and its subsidiaries (the Group) for the quarter ended March 31, 2020 was approved by the Board of Directors on May 15, 2020.
Content and form of the consolidated financial statements
The Condensed Consolidated Interim Financial Statements at March 31 were prepared as per IAS 34 "Interim Financial Statements" including condensed explanatory notes in accordance with the above- mentioned international accounting standard and supplemented in order to provide greater disclosure where considered necessary. These Consolidated Financial Statements must therefore be read together
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 47 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
with the Consolidated Financial Statements for the year 2019 prepared in accordance with IFRS International Accounting Standards issued by the International Accounting Standards Board ("IASB") and prepared considering the transition date to IFRS (First Time Adoption "FTA") as January 1, 2012.
The accounting standards and policies utilised are those adopted for the preparation of the financial statements at December 31, 2019, as from January 1, 2020 the new amendments to international accounting standards entered into force which did not have an impact on the quarter under review.
This interim report has not been audited.
The Group opted to apply the Separate and Consolidated Statement of Comprehensive Income, as permitted by IAS 1, considering such more representative of operations. In particular, the Statement of Consolidated Financial Position has been prepared by separating assets and liabilities into current and non- current categories.
An asset is considered current where:
- it is expected to be realized, or is held for sale or consumption, in the normal course of the operating cycle;
- it is held mainly for the purpose of negotiating it;
- it is expected to be realised within twelve months from the statement of financial position date; or
- it comprises cash or cash equivalents, upon which no prohibition exists on their exchange or utilisation to settle a liability for at least 12 months from the statement of financial position date.
All other assets are classified as non-current.
A liability is considered current where:
- it is expected to be settled within the normal operating cycle;
- it is held principally for trading;
- it is expected to be settled within twelve months from theyear-end;
- the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the statement of financial position date.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified respectively under non-current assets and liabilities.
The Consolidated Income Statement has been prepared by classifying income and expenses by their nature, whereas the Consolidated Cash Flow Statement has been prepared using the indirect method, according to which cash flows are classified into operating, investing and financing categories.
Consolidation scope
The consolidated financial statements were prepared based on the financial statements of the Parent Company and its subsidiaries, directly and indirectly held, approved by the respective shareholders' meetings or executive bodies, appropriately adjusted in line with IFRS. The subsidiary companies are fully consolidated from the date of acquisition, or from the date in which the Group acquires control, and ceases to be consolidated at the date on which the Group no longer has control.
The following tables summarise the information on the subsidiaries and associates at March 31, 2020 and December 31, 2019 in terms of the Group's direct and indirect holding.
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 48 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Subsidiaries (in thousands of Euro) | Currency | Share | as at | as at | ||||||
capital | 31.03.2020 | 31.12.2019 | ||||||||
Fast Freight Marconi S.p.a. Società Unipersonale | Euro | 520 | 100.00% | 100.00% | ||||||
Tag Bologna S.r.l. Società Unipersonale | Euro | 316 | 100.00% | 100.00% |
Associates (in thousands of Euro) | Currency | Share | as at | as at | |||||||
capital | 31.03.2020 | 31.12.2019 | |||||||||
Ravenna Terminal Passeggeri S.r.l. | Euro | 50 | 24.00% | 24.00% |
Operating Segment information
The Aeroporto Guglielmo Marconi di Bologna Group, in application of IFRS 8, identified its operating segments as the business areas which generate revenues and costs, whose results are periodically reviewed by the highest decision-making level in order to evaluate the outcome of the decisions concerning the allocation of resources and for which separate financial statements are available.
The Group operating segments as per IFRS 8 - Operating Segment are as follows:
- Aviation;
- Non-Aviation;
- Other.
The disclosure concerning operating segments for the Continuing Operations is outlined to reflect the future organisational structure of the Group, with separate disclosure for Discontinued Operations.
In relation to the operating segments, the Group evaluates their performance based on passenger revenues, separating those concerning the aviation sector from those concerning the non-aviation sector.
The account "Other" residually includes those businesses not directly attributable to the identified segments.
In Group operations, financial income and charges and taxes are not allocated to the individual operating segments.
The segment assets are those employed by the segment for operating activities or which may be allocated reasonably for the carrying out of operating activities.
The segment assets presented are measured utilising the same accounting policies adopted for the presentation of the Group consolidated financial statements.
for the quarter | for the quarter | for the quarter | Total for the quarter | ||||||||
ended | ended | ||||||||||
in thousands of Euro | ended | ||||||||||
ended 31.03.2020 | 31.03.2020 | 31.03.2020 | |||||||||
Aviation | 31.03.2020 | ||||||||||
Non-Aviation | Other | ||||||||||
Revenues | 11,599 | 9,212 | 0 | 20,811 | |||||||
Costs | (11,308) | (5,304) | 0 | (16,612) | |||||||
EBITDA | 291 | 3,908 | 0 | 4,199 | |||||||
Depreciation, amortisation & impairment | (1,597) | (996) | 0 | (2,593) | |||||||
Provisions | (554) | (153) | 0 | (707) | |||||||
Operating result | (1,860) | 2,759 | 0 | 899 | |||||||
Financial income | 0 | 0 | 94 | 94 | |||||||
Financial expenses | 0 | 0 | (101) | (101) | |||||||
Result before taxes | (1,860) | 2,759 | (7) | 892 | |||||||
Taxes for the period | 0 | 0 | (273) | (273) | |||||||
Profit (loss) for the period | (1,860) | 2,759 | (280) | 619 | |||||||
Minority interest profit (loss) | 0 | 0 | 0 | 0 | |||||||
Group profit (loss) for the period | 0 | 0 | 0 | 619 | |||||||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 49 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
The decrease due to the impact of the COVID-19 emergency on the margins of the Aviation SBU in the first quarter of 2020 is greater than that of the Non Aviation SBU due to the higher cost rigidity of this Business Unit.
for the quarter | for the quarter | for the quarter | Total for the quarter | ||||||||
ended | ended | ||||||||||
in thousands of Euro | ended | ||||||||||
ended 31.03.2019 | 31.03.2019 | 31.03.2019 | |||||||||
Aviation | 31.03.2019 | ||||||||||
Non-Aviation | Other | ||||||||||
Revenues | 17,377 | 10,112 | 0 | 27,489 | |||||||
Costs | (14,467) | (4,674) | 0 | (19,141) | |||||||
EBITDA | 2,910 | 5,438 | 0 | 8,348 | |||||||
Depreciation, amortisation & impairment | (1,707) | (763) | 0 | (2,470) | |||||||
Provisions | (512) | (82) | 0 | (594) | |||||||
Operating result | 691 | 4,593 | 0 | 5,284 | |||||||
Financial income | 0 | 0 | 39 | 39 | |||||||
Financial expenses | 0 | 0 | (299) | (299) | |||||||
Result before taxes | 691 | 4,593 | (260) | 5,024 | |||||||
Taxes for the period | 0 | 0 | (1,477) | (1,477) | |||||||
Profit (loss) for the period | 691 | 4,593 | (1,737) | 3,547 | |||||||
Minority interest profit (loss) | 0 | 0 | 0 | 0 | |||||||
Group profit (loss) for the period | 0 | 0 | 0 | 3,547 |
The table below presents the segment information for assets:
As at | As at 31 03.2020 | As at 31 03.2020 | As at | ||||||||
In thousands of Euro | 31 03.2020 | ||||||||||
Non-Aviation | Other | 31 03.2020 Total | |||||||||
Aviation | |||||||||||
Non-current assets | 164,945 | 33,926 | 19,721 | 218,592 | |||||||
Intangible assets | 160,814 | 18,705 | 0 | 179,519 | |||||||
Concession rights | 159,721 | 17,576 | 0 | 177,297 | |||||||
Other intangible assets | 1,093 | 1,129 | 0 | 2,222 | |||||||
Tangible assets | 4,024 | 15,143 | 0 | 19,167 | |||||||
Property, plant and equipment | 4,024 | 10,411 | 0 | 14,435 | |||||||
Investment property | 0 | 4,732 | 0 | 4,732 | |||||||
Other non-current assets | 107 | 78 | 19,721 | 19,906 | |||||||
Investments | 0 | 0 | 44 | 44 | |||||||
Other non-current financial assets | 0 | 0 | 12,595 | 12,595 | |||||||
Deferred tax assets | 0 | 0 | 6,276 | 6,276 | |||||||
Other non-current assets | 107 | 78 | 806 | 991 | |||||||
Current assets | 11,213 | 7,023 | 28,533 | 46,769 | |||||||
Inventories | 357 | 284 | 0 | 641 | |||||||
Trade receivables | 7,761 | 4,580 | 0 | 12,341 | |||||||
Other current assets | 4,702 | 552 | 1,215 | 6,469 | |||||||
Current financial assets | 0 | 0 | 501 | 501 | |||||||
Cash and cash equivalents | 0 | 0 | 26,817 | 26,817 | |||||||
Total assets | 177,765 | 39,342 | 48,254 | 265,361 | |||||||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 50 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
As at 31.03.2019 | As at | As at | Total | ||||||||
in thousands of Euro | 31.03.2019 | 31.03.2019 | As at | ||||||||
Aviation | |||||||||||
Non-Aviation | Other | 31.03.2019 | |||||||||
Non-current assets | 162,708 | 29,477 | 23,677 | 215,862 | |||||||
Intangible assets | 156,661 | 14,362 | 0 | 171,023 | |||||||
Concession rights | 155,576 | 13,319 | 0 | 168,895 | |||||||
Other intangible assets | 1,085 | 1,043 | 0 | 2,128 | |||||||
Tangible assets | 5,976 | 15,081 | 0 | 21,057 | |||||||
Property, plant and equipment | 5,976 | 10,349 | 0 | 16,325 | |||||||
Investment property | 0 | 4,732 | 0 | 4,732 | |||||||
Other non-current assets | 71 | 34 | 23,677 | 23,782 | |||||||
Investments | 0 | 0 | 43 | 43 | |||||||
Other non-current financial assets | 0 | 0 | 16,207 | 16,207 | |||||||
Deferred tax assets | 0 | 0 | 6,061 | 6,061 | |||||||
Other non-current assets | 71 | 34 | 1,366 | 1,471 | |||||||
Current assets | 17,437 | 4,733 | 29,382 | 51,552 | |||||||
Inventories | 347 | 212 | 0 | 559 | |||||||
Trade receivables | 12,673 | 3,616 | 0 | 16,289 | |||||||
Other current assets | 4,417 | 905 | 744 | 6,066 | |||||||
Current financial assets | 0 | 0 | 75 | 75 | |||||||
Cash and cash equivalents | 0 | 0 | 28,563 | 28,563 | |||||||
Total assets | 180,145 | 34,210 | 53,059 | 267,414 | |||||||
Segment disclosure regarding the identified operating segments is undertaken as outlined below.
Aviation: refers to the airport's core business. This includes aircraft landing, take-off and parking fees, passenger boarding fees, freight fees, in addition to passenger security control fees and hand-carry and checked baggage control fees. It includes also cargo handling, customs clearance and fuelling operations. Finally, this segment includes all centralised infrastructure and exclusive assets: the centralised infrastructure represents revenues received in relation to infrastructure under the exclusive operation of the airport management company for reasons of safety, security or in view of their economic impact. Exclusive assets concern check-in desks, the gates and spaces assigned to airport operators.
Non-Aviation: operations not directly connected to the aviation business. This include sub-concession, retail, catering, self-hire and parking management operations, the Marconi Business Lounge and advertising.
The breakdown of revenues and costs between the Aviation and Non-Aviation SBU's follows ENAC's guidelines for analytic/regulatory reporting for airport management companies, in line with Article 11 deciesof Law No. 248/05 and the Ministry of Transport Guidelines of December 31, 2006.
The residual accounts excluded from regulatory reporting were subsequently allocated according to the operating criteria. The main differences were as follows:
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
- accounts not considered relevant for regulatory accounting purposes which are allocated through a specific review of the individual cost/revenue items;
- revenues and costs for construction services allocated according to an analytical breakdown of investments in the year between the two SBU's according to regulatory criteria;
- incentives for the development of air traffic, allocated entirely to the Aviation SBU in accordance with the financial statement breakdown.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
COMMENTS ON THE MAIN ITEMS ON THE STATEMENT OF CONSOLIDATED FINANCIAL POSITION
ASSETS
1. Intangible assets
The following table breaks down intangible assets at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Concession rights | 177,297 | 176,184 | 1,113 | |
Software, licences and similar rights | 1,536 | 1,752 | (216) | |
Other intangible assets | 59 | 60 | (1) | |
Other intangible assets in progress | 627 | 464 | 163 | |
TOTAL INTANGIBLE ASSETS | 179,519 | 178,460 | 1,059 |
In the first quarter of 2020, Concession rights increased by Euro 2.7 million, of which Euro 2.6 million (equal to the fair value of construction services provided in the period), principally due to:
- construction work on a new area consisting of a new cargo building with related annexes for a specialised operator;
- extension and modification of the departing baggage handling system (BHS) to comply with "STANDARD 3" security level as required by current regulations;
- other preparatory work for the extension of the passenger terminal.
Amortisation of concession rights in the period amounted to Euro 1.6 million and was applied according to the residual duration of the concession.
Software, licenses and similar rights, recorded an increase of Euro 85 thousand relating to the development of some software platforms and the modernization of the GSTAR System through the activation of the module serving the de- icing plant.
Other intangible assets in progress include software development not concluded at March 31, 2020.
Test on the recoverability of assets and group of assets
In light of the COVID-19 crisis, already at the closing of the 2019 financial statements, the Group has assessed the need to carry out a further sensitivity analysis of the 2018-2044 operating and financial forecasts formulated by the Board of Directors and used to carry out the impairment test with reference to the amounts recognised under Concession rights as at December 31, 2019. The sensitivity test allowed for an assessment of the effect of a potential reduction in EBITDA of nearly 40% over the next three years; this analysis showed that, even in this eventuality, no impairment indicators would result. At March 31, 2020, the Group considers that this estimate is still adequate and that therefore there are no impairments on the carrying amounts of Concession rights.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
2. Tangible assets
The following table breaks down tangible assets at March 31, 2020 (compared with December 31, 2019).
In thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | ||
Land | 2,763 | 2,763 | 0 | ||
Buildings, light constructions and improvements | 3,778 | 3,876 | (98) | ||
Machinery, equipment & plant | 2,916 | 3,109 | (193) | ||
Furniture, EDP and transport | 2,078 | 2,147 | (69) | ||
Building plant and machinery in progress and advances | 1,063 | 1,087 | (24) | ||
Investment property | 4,732 | 4,732 | 0 | ||
TOTAL TANGIBLE ASSETS | 17,330 | 17,714 | (384) | ||
Land in leasing | 1,623 | 1,732 | (109) | ||
Leased buildings and minor construction and improvements | 0 | 2 | (2) | ||
Leased machinery, equipment & plant | 18 | 11 | 7 | ||
Leased furniture, office machinery, transport equipment | 196 | 224 | (28) | ||
TOTAL LEASED TANGIBLE ASSETS | 1,837 | 1,969 | (132) | ||
TOTAL TANGIBLE ASSETS | 19,167 | 19,683 | (516) | ||
In Q1 2020, this category increased overall by Euro 0.15 million and mainly concerns the purchase of furniture and EDP.
Investment property includes the total value of land owned by the Group earmarked for the construction of investment property; these amounts were initially recorded at purchase cost and subsequently measured using the cost method.
This land is not subject to amortisation but, as per IAS 40, a technical report is undertaken to support the fair value. The technical report undertaken internally by the Parent Company confirms that the value of the inscription cost approximates, for nature and strategic value of the investment, its fair value. At the preparation date of the financial statements, there were no impairment indicators on these assets.
3. Investments
The tables below breaks down investments at March 31, 2020 (compared to December 31, 2019); the values and composition of investments remain unchanged.
in thousands of Euro | As at | Increases / | Decreases / | Write-downs | As at | |||||||||
31.12.2019 | Acquisitions | Disposals | 31.03.2020 | |||||||||||
Other investments | 44 | 0 | 0 | 0 | 44 | |||||||||
TOTAL INVESTMENTS | 44 | 0 | 0 | 0 | 44 |
The composition of the account is as follows:
in thousands of Euro | Quota | As at 31.03.2020 | As at 31.12.2019 | Change | |||||
Consorzio Energia Fiera District | 14.3% | 3 | 3 | 0 | |||||
CAAF dell'Industria Spa | 0.07% | 0 | 0 | 0 | |||||
Bologna Welcome Srl | 10% | 41 | 41 | 0 | |||||
TOTAL OTHER INVESTMENTS | 44 | 44 | 0 | ||||||
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
4. Other non-current financial assets
The following table shows the movements in other non-current financial assets for the quarter ended March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at | Increases/ | Decreases / | Write- | As at | |||||||||||
31.12.2019 | Acquisitions | Reclass. | downs | 31.03.2020 | ||||||||||||
Receivables from Terminal Value | 364 | 3 | 0 | 0 | 367 | |||||||||||
Equity Financial Instruments | 10,873 | 0 | 0 | 0 | 10,873 | |||||||||||
Escrow bank accounts/Saving bonds | 70 | 0 | 0 | 0 | 70 | |||||||||||
Other financial assets | 1,279 | 6 | 0 | 0 | 1,285 | |||||||||||
TOTAL OTHER NON-CURRENT FINANCIAL ASSETS | 12,586 | 9 | 0 | 0 | 12,595 |
At March 31, 2020, the account "Other non-current financial assets" mainly comprises:
oEuro 0.4 million in receivables from Terminal Value for the portion of fees for construction/improvement services provided by the Group relating to investments, as well as a supplement to the performance obligation fee, in accordance with IFRS 15, on the interventions carried out on the provisions for renewal relating to the concession contract. This receivable for the Terminal Value corresponds to the present value at March 31, 2020 of the receivable from application of the Terminal Value regulation, as per the updated Article 703 of the Navigation Code (Article 15 quinquies, paragraph 1, Legislative Decree No. 148 of 16/10/2017, converted with amendments by Law No. 172/2017), which established that, for investments in concession rights, the airport manager shall receive from the succeeding concession holder, on conclusion of the concession, an amount equal to the residual value at that date of the investment, in addition to the interventions made on the provisions for renewal, both calculated according to the regulatory accounting rules;
- Euro 10.9 million of equity financial instruments in Marconi Express Spa, concession holder for the construction and management of the rapid rail link infrastructure between the Airport and Bologna Central Station called People Mover. This financial instrument, subscribed on January 21, 2016 for a total value of Euro 10.9 million, is recorded at March 31, 2020 corresponding to the amount effectively paid or rather the cost incurred at that date. The investment, in addition to the strategic/operating interest related to improving accessibility to the airport, meets the Group's objective both in relation to the collection of the contractual cash flows and to any future sale of the financial asset. In accordance with IFRS 9, since it is an equity instrument, financial assets are measured at fair value through profit or loss. Specifically, considering the difficulty in measuring the fair value of this Equity Financial Instrument, the Group availed of the exemption permitted for
equity financial instruments where the fair value may not be reliably measured. Consequently, the subsequent valuations of this SFP are at cost and any reductions in value, quantified comparing the book value with the present value of the expected cash flows discounted at the market rate for similar instruments, are recorded in the Income Statement and may not be written back;
- Euro 0.07 million to the account "Escrow bank accounts/Savings bonds" concerning an escrow bank
account at Banco BPM for the payment of the amounts due on the provision to and/or withdrawal of goods from the "Temporary Custody" Warehouse at Bologna Airport;
- Euro 1.3 million of capitalisation products; the initial Euro 0.3 million of5-year duration and May 2021 maturity and the second of Euro 1 million acquired in 2019, of 10-year duration and with 2029 maturity. In accordance with the standard IFRS 9, these assets are classified to the category "Held to collect - HTC", as this complies with the Group's need to invest temporary liquidity held in order to collect the contractual cash flows. In this specific case, the maturity is defined contractually, but the return is related to the capital management performance and therefore these financial instruments are measured at fair value through profit or loss.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
5. Deferred tax assets
The following table presents the movements in deferred tax assets for the period ended March 31, 2020, compared with December 31, 2019.
in thousands of Euro | As at 31.12.2019 | Provisions | Util./Reclass. | As at 31.03.2020 | |
DEFERRED TAX ASSETS | 6,190 | 285 | (199) | 6,276 |
6. Other non-current assets
The following table breaks down other non-current assets at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Non-current prepaid expenses and accrued income | 185 | 184 | 1 | |
Guarantee deposits | 88 | 88 | 0 | |
Non-current tax receivables | 718 | 722 | (4) | |
OTHER NON-CURRENT ASSETS | 991 | 994 | (3) | |
7. Inventories
The following table breaks down inventories at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Inventories of raw materials, supplies and consumables | 604 | 519 | 85 | |
Inventories of finished products | 37 | 103 | (66) | |
INVENTORIES | 641 | 622 | 19 |
8. Trade receivables
The table below illustrates the trade receivables and the relative doubtful debt provision:
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Trade receivables | 14,419 | 17,300 | (2,881) | |
Provisions for doubtful accounts | (2,078) | (1,836) | (242) | |
TRADE RECEIVABLES | 12,341 | 15,464 | (3,123) |
At March 31, 2020, trade receivables for Euro 12.3 million were recorded net of the provision for doubtful accounts of Euro 2 million. Gross trade receivables contracted from Euro 17.3 million at December 31, 2019 to Euro 14.4 million, mainly due to the drop in revenues as a result of the lower traffic due to the COVID-19 pandemic. The increase in the provision for doubtful accounts is due both to the write-downs carried out on the basis of specific analysis of cases in arrears and/or in dispute, whose probability of recovery reduced in the period and the write-down applied on the residual debtor balance, classified by customer category and overdue period, with the simplified parameter method applied, as permitted by IFRS 9 for companies with a diversified and fragmented client portfolio.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
The movements in the provisions for doubtful accounts were as follows:
in thousands of Euro | As at | Provisions | Utilizations | Releases | As at | |||||||
31.12.2019 | 31.03.2020 | |||||||||||
PROVISIONS FOR DOUBTFUL ACCOUNTS | (1,836) | (242) | 0 | 0 | (2,078) |
9. Other current assets
The following table breaks down other current assets at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
VAT Receivable | 629 | 182 | 447 | |
Other tax receivables | 0 | 7 | (7) | |
Employee receivables | 64 | 83 | (19) | |
Other receivables | 5,776 | 4,931 | 845 | |
OTHER CURRENT ASSETS | 6,469 | 5,203 | 1,266 | |
The increase in the VAT receivable is mainly due to the contraction in transactions since the end of February and throughout March 2020.
Other receivables are composed of:
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Prepayments and accrued income | 1,050 | 327 | 723 | |
Advances to suppliers | 599 | 61 | 538 | |
Pension and social security institutions | 298 | 19 | 279 | |
Municipal surtax receivables | 3,973 | 4,799 | (826) | |
Other current receivables provision for doubtful accounts | (722) | (763) | 41 | |
IRESA receivables | 234 | 0 | 234 | |
Other current receivables | 344 | 488 | (144) | |
TOTAL OTHER RECEIVABLES | 5,776 | 4,931 | 845 | |
The increase in "prepayments and accrued income" is linked to the seasonality of the period, while the increase in "advances to suppliers" is due to a flight to transport medical cargo in April, for which the subsidiary FFM has advanced the payment following early collection received from the customer and classified under "other current payables".
The account "other current receivables provision for doubtful accounts" includes the provision for municipal surtax doubtful accounts obtained for reclassification under assets in the statement of financial position, as a deduction of the respective receivable, of the municipal surtax to the carriers which in the meantime were subject to administration procedures or which contested the charge.
This account:
- is exclusively an asset account,
- does not involve any provisions to the Income Statement,
- was classified as a deduction of the respective receivables due to the high improbability of recovery, reporting the following movements:
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
in thousands of Euro | As at | Provisions/Increases | Utilizations | Releases | As at | ||||
31.12.2019 | 31.03.2020 | ||||||||
Municipal surtax receivable provision | (763) | 0 | 41 | 0 | (722) | ||||
TOTAL OTHER RECEIVABLES PROVISIONS FOR DOUBTFUL ACCOUNTS | (763) | 0 | 41 | 0 | (722) |
Finally, the IRESA receivable is due to the invoicing to the carriers, on behalf of the Emilia-Romagna Region as from January 1, 2020, of the new regional Iresa - Regional Tax on Aircraft Sound Emissions - whose collection is fully paid to the Region itself.
10. Current Financial Assets
The following table breaks down current financial assets at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Deposit accounts | 500 | 500 | 0 | |
Other financial receivables | 1 | 1 | 0 | |
CURRENT FINANCIAL ASSETS | 501 | 501 | 0 | |
At December 31, 2019, this account comprised a deposit certificate of Euro 500 thousand, subscribed in 2019 and with maturity of October 2020. This category of financial investments also meets the Group's temporary needs to invest liquidity in order to obtain the contractual cash flows. As per IFRS 9, these investments are classified in the category "Held to collect - HTC". The contractual maturity defined, the yield defined and calculated on the notional amount permits the passing of the SPPI tests and therefore the valuation at amortised cost.
11. Cash and cash equivalents
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Bank and postal deposits | 26,793 | 29,227 | (2,434) | |
Cash in hand and similar | 24 | 26 | (2) | |
CASH AND CASH EQUIVALENTS | 26,817 | 29,253 | (2,436) |
"Bank and postal deposits" represent the bank current account balances.
LIABILITIES
12. Shareholders' Equity
The following table breaks down the Shareholders' Equity at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |||
Share capital | 90,314 | 90,314 | 0 | |||
Reserves | 87,862 | 67,009 | 20,853 | |||
Profit | 619 | 20,852 | (20,233) | |||
GROUP SHAREHOLDERS' EQUITY | 178,795 | 178,175 | 620 | |||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 58 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
- Share capital
The share capital of the Parent Company at March 31, 2020 amounts to Euro 90,314,162, entirely paid-in and comprising 36,125,665 ordinary shares without par value.
The following table outlines the calculation of the basic and diluted earnings per share:
for the quarter | for the quarter | |
in Euro | ended | ended |
31.03.2020 | 31.03.2019 | |
Group profit | 619,478 | 3,547,111 |
Average number of shares outstanding | 36,125,665 | 36,125,665 |
Undiluted earnings/(losses) per share | 0.02 | 0.10 |
Diluted earnings/(losses) per share | 0.02 | 0.10 |
(*) Consolidated Statement of Comprehensive Income
The undiluted earnings and diluted earnings per share of the AdB Group at March 31, 2020 and at December 31, 2019 are the same due to the absence of potential dilutive instruments.
- Reserves
The following table breaks down the Reserves at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Share premium reserve | 25,683 | 25,683 | 0 | |
Legal reserve | 7,170 | 7,170 | 0 | |
Extraordinary Reserve | 37,591 | 37,029 | 562 | |
FTA Reserve | (3,272) | (3,272) | 0 | |
Profits (losses) carried forward | 21,677 | 1,387 | 20,290 | |
OCI Reserve | (988) | (988) | 0 | |
TOTAL RESERVES | 87,862 | 67,009 | 20,853 | |
The share premium reserve comprises:
oEuro 14.35 million following the paid-in share capital increase approved by the Shareholders' Meeting of February 20, 2006;
oEuro 11.33 million following the public offering of shares in July 2015.
Pursuant to Article 2431 of the Civil Code this reserve is available but may not be distributed until the legal reserve has reached the limit established as per article 2430 of the Civil Code.
The extraordinary reserve increased due to the allocation of the 2019 profit of the subsidiary FFM.
Retained earnings increased due to:
- the profits/losses deriving from the IAS accounting entries of the subsidiary companies;
- the allocation of result for the previous year of the subsidiary Tag;
- the result for the previous year of the Parent Company ahead of the allocation approved by the Shareholders' Meeting of April 30, 2020.
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 59 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
The OCI reserve is unchanged on December 31, 2019 as the Group proceeded with discounting the severance and other personnel provisions in accordance with IAS 19 revised, only for the half-year and annual financial statements
13. Severance and other personnel provisions
The following table breaks down severance and other personnel provisions at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Severance | 4,054 | 4,088 | (34) | |
Other personnel provisions | 187 | 169 | 18 | |
SEVERANCE AND OTHER PERSONNEL PROVISIONS | 4,241 | 4,257 | (16) | |
The table below shows the movements in the provisions in the period:
Service | Net | Benefits | Actuarial | As at | ||||||||||||||||
in thousands of Euro | As at 31.12.2019 | profits/ | ||||||||||||||||||
cost | interest | paid | 31.03.2020 | |||||||||||||||||
(losses) | ||||||||||||||||||||
Severance | 4,088 | 4 | 16 | (55) | 0 | 4,054 | ||||||||||||||
Other personnel provisions | 169 | 16 | 0 | 0 | 0 | 187 | ||||||||||||||
SEVERANCE AND OTHER PERSONNEL PROVISIONS | 4,257 | 20 | 16 | (55) | 0 | 4,241 | ||||||||||||||
Actuarial profits/losses did not report any movement in the quarter, due to that stated at note 12.
14. Deferred tax liabilities
The following table breaks down the deferred tax liabilities at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.12.2019 | Provisions | Utilizations | As at 31.03.2020 | ||
DEFERRED TAX LIABILITIES | 2,558 | 15 | 0 | 2,573 | ||
15. Provision for renewal of airport infrastructure (non-current)
The provision for renewal of airport infrastructure includes the provision allocated to cover the conservation maintenance expenses and renewal of the assets held under concession which the Group must return at the end of the concession period, scheduled in 2044, in perfect functioning state.
The following table presents the movements in the provision in the first quarter of 2020:
As at | Provision | Reclassification | As at | |||||||||
in thousands of Euro | 31.12.201 | Utilization | 31.03.202 | |||||||||
s | s | |||||||||||
9 | s | 0 | ||||||||||
PROVISION FOR RENEWAL OF AIRPORT INFRASTRUCTURE (NON- | 9,524 | 398 | 0 | (145) | 9,777 | |||||||
CURRENT) | ||||||||||||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 60 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
The increases in the period totalled Euro 0.4 million, of which Euro 0.5 million classified under provisions in the income statement and net of Euro 0.1 million recorded under financial income from discounting.
The utilisations of the provision total Euro 0.1 million and are stated in the current provision for renewal of airport infrastructure (note 20).
At March 31, 2020, the infrastructure renewal provision totals Euro 11.5 million.
16. Provisions for risks and charges (non-current)
The changes in the provision for risks and charges in the quarter ended March 31, 2020 are reported below:
in thousands of Euro | As at | Provisions | Util./Other | As at | |||||||||||
31.12.2019 | decreases | 31.03.2020 | |||||||||||||
Risk provision for disputes | 978 | 1 | 0 | 979 | |||||||||||
Provisions for other risks and charges | 412 | 0 | 0 | 412 | |||||||||||
PROVISIONS FOR RISKS AND CHARGES (NON-CURRENT) | 1,390 | 1 | 0 | 1,391 | |||||||||||
Contingent liabilities
With regards to the notification of invitation from the Municipality of Bologna, received on February 10, 2020, of a differing cadastral classification of a number of buildings - against that agreed with the administration since 2007 - with a consequent impact on the IMU tax for recent years and following which a provision for risks of Euro 215 thousand was recognised to the 2019 financial statements, the Directors, taking into account the factual and legal arguments shared with their tax advisors, have decided to qualify the contingent liability as possible for a further estimated amount of Euro 288 thousand and therefore to include appropriate information in the Notes.
On July 26, 2016, on the completion of a general review commenced on May 18, 2016 for the year 2013 of the Parent Company, the Bologna Tax Agency prepared a tax assessment highlighting a presumed derecognition of the IRES deductibility of the loss of Euro 5 million deriving from the enforcement of the surety guarantee issued in 2007 by AdB to the financial institutions of SEAF, Società di Gestione dell'Aeroporto di Forlì, company declared bankrupt in 2013.
The Directors, taking account of the factual and legal arguments of the Parent Company, as formalised in the petitions forwarded to the Tax Agency concerning the financial and therefore tax reasoning behind the choices made, categories the liability as potential and therefore only includes appropriate disclosure in the Notes.
In relation, finally, to the extraordinary administration of Alitalia, the Group assessed the potential liability related to the revocation of receivables arising in the six months before the procedure, for an amount of Euro 1.49 million, net of municipal surtaxes. At the preparation date of this document, and specifically taking account of the information noted and the defensive arguments against the advanced action (see the Directors' Report), the Directors considered it appropriate to provide disclosure in the Notes, without making any accrual, in view of the fact that in this case the conditions for action by the creditor do not exist, although while at the same time continuing to closely monitor the airline's situation.
17. Non-current financial liabilities
The following table breaks down non-current financial liabilities at March 31, 2020 (compared with December 31, 2019).
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Bank loans - non-current | 11,518 | 11,643 | (125) | |
Non-current financial payables for leasing | 1,322 | 1,437 | (115) | |
NON-CURRENT FINANCIAL LIABILIITES | 12,840 | 13,080 | (240) |
At March 31, 2020, the non-current portion of the loans or rather the medium/long-term portion of the loans undertaken by the Group and in place at this date amount to Euro 11.5 million, with the decrease in the period due to the reclassification of the instalment maturing on March 31, 2020 to current financial liabilities (account 22). At March 31, 2020, total bank loans did not change on December 31, 2019 (Euro 14.7 million, of which Euro 11.5 million non-current and Euro 3.2 million current).
The contractual conditions of the loans in place at March 31, 2020 are illustrated below:
Credit Institution | Type of loan | Interest rate applied | Rate | Maturity | Covenant | |||
Intesa San Paolo S.p.A. | Loan | Fixed rate of 3% | Half-Yearly | 2024 | Yes | |||
Monte dei Paschi di Siena | ||||||||
(former Banca Agricola | ||||||||
Mantovana) | Loan | Euribor variable 3 Months + spread 0.9% | Quarterly | 2026 | No |
The loans are not covered by secured guarantees.
With reference to the cross-default clauses on the loan contracts of the Company, these include both clauses where the benefits are no longer applicable and where the Company financed is not in compliance with obligations of a credit or financial nature, or guarantees assumed with any party. We report that at March 31, 2020 the Group has not received any communication for application of cross default clauses by any of its lenders.
Discussions are in addition underway with Banca Intesa with regard to a failure to comply with loan covenants due to worsening margins as the current crisis progresses.
"Non-current financial liabilities for leasing" of Euro 1.3 million concern contractually due fees and with maturity beyond 12 months, for third party asset rights-of-use recognised to fixed assets from January 1, 2019 under IFRS 16.
We illustrate below the table required by the amended IAS 7 - Cash Flow Statement for a greater disclosure of changes in financial liabilities:
in thousands of Euro | 31/12/2019 | Cash flows | New | Interest/Other | 31/03/2020 | ||
contracts | Reclassifications | ||||||
Loans - current portion | 3,059 | 0 | 0 | 135 | 3,194 | ||
Lease liabilities - current portion | 521 | (57) | 4 | 117 | 585 | ||
Loans - non-current portion | 11,643 | 0 | 0 | (125) | 11,518 | ||
Lease liabilities - non-current portion | 1,437 | 0 | 6 | (121) | 1,322 | ||
Total | 16,660 | (57) | 10 | 6 | 16,619 | ||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 62 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
18. Trade payables
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Trade payables | 15,408 | 18,537 | (3,129) | |
TRADE PAYABLES | 15,408 | 18,537 | (3,129) | |
At March 31, 2020, trade payables amounted to Euro 15.4 million, decreasing on December 31, 2019 due to seasonality and the reduction in costs in the quarter under review.
19. Other Liabilities
The following table breaks down current liabilities at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Current tax payables | 4,055 | 3,598 | 457 | |
Employee payables and social security institutions | 4,484 | 4,708 | (224) | |
ENAC concession fee and other State payables | 15,976 | 17,669 | (1,693) | |
Other current payables, accrued expenses and deferred income | 6,935 | 5,137 | 1,798 | |
TOTAL OTHER CURRENT LIABILITIES | 31,450 | 31,112 | 338 | |
The principal changes were as follows:
- Current tax payables
The following table breaks down tax payables at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Direct income taxes | 2,965 | 2,620 | 345 | |
Other tax payables | 1,090 | 978 | 112 | |
TOTAL CURRENT TAX PAYABLES | 4,055 | 3,598 | 457 |
The increase in this account mainly relates to the higher payable for estimated direct taxes in the quarter.
- Employee payables and social security institutions
The following table breaks down employee payables and social security institutions at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Employee salaries | 916 | 1,030 | (114) | |
Employee deferred compensation | 2,339 | 2,365 | (26) | |
Social security payables | 1,229 | 1,313 | (84) | |
EMPLOYEE PAYABLES AND SOCIAL SECURITY INSTITUTIONS | 4,484 | 4,708 | (224) |
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 63 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
- ENAC concession fee and other State payables
The ENAC concession fees and other State payables mainly comprises:
- Euro 14.5 million (Euro 14.2 million at December 31, 2019) concerning the fire prevention service as governed by Article 1, paragraph 1328 of the 2007 Finance Act, modified by Article 4, paragraph 3bis of Law No. 2/2009. For further details, reference should be made to the Directors' Report to the 2019 Annual Accounts;
- Euro 1.5 million (Euro 3.5 million at December 31, 2019) as the variable airport concession fee payable.
- Other current liabilities, accrued liabilities and deferred income
The following table breaks down current liabilities, accrued liabilities and deferred income at March 31, 2020 (compared with December 31, 2019).
in thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Municipal surtax payables and Iresa | 3,486 | 4,036 | (550) | |
Other current liabilities | 2,539 | 1,018 | 1,521 | |
Current accrued liabilities and deferred income | 910 | 83 | 827 | |
TOTAL OTHER CURRENT PAYABLES, ACCRUED EXPENSES AND DEFERRED INCOME | 6,935 | 5,137 | 1,798 |
The main account concerns the municipal surtax and, from January 1, 2020 for Iresa, relating to the receivables from carriers not yet received at March 31 for Euro 3.5 million. The portion of the municipality surtax payable and for IRESA relating to receivables collected from carriers, not yet paid to the creditor entities on the other hand is classified under current financial liabilities (Note 22).
"Other current liabilities" include deposits and advances received from customers in addition to deferred income and miscellaneous payables. The increase is due to a flight to transport medical cargo in April, for which the subsidiary FFM has advanced the payment following early collection received from the customer and classified to the present item.
Finally, the increase in current accruals and deferred income is due to the invoicing process which provides for the advance invoicing of sub-license fees and other services.
20. Provision for renewal of airport infrastructure (current)
The following table shows the movement of the provision for renewal of airport infrastructure during the quarter.
in thousands of Euro | As at | Provisions | Utilizations | Reclassifications | As at | |||
31.12.2019 | 31.03.2020 | |||||||
PROVISION FOR RENEWAL OF AIRPORT INFRASTRUCTURE (CURRENT) | 4,040 | 0 | (145) | 145 | 4,040 |
Reference should be made to Note 15 for further information on this provision.
21. Provisions for risks & charges (current)
The changes in the provision for risks and current charges in the quarter are reported below:
in thousands of Euro | As at | Provisions | Other increases | As at | ||||||||||
31.12.2019 | 31.03.2020 | |||||||||||||
Employee back-dated provision | 18 | 2 | 0 | 20 | ||||||||||
PROVISIONS FOR RISKS AND CHARGES (CURRENT) | 18 | 2 | 0 | 20 | ||||||||||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 64 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
The account concerns the employee back-dated provision on which, within the framework of the renewal of the Assohandlers Trade Union Agreement expired on June 30, 2017, an estimate of the liabilities for a One-off/back-dated employee payments was accrued for the period of the subsidiary FFM.
22. Current financial liabilities
The following table breaks down current financial liabilities at March 31, 2020 (compared with December 31, 2019).
In thousands of Euro | As at 31.03.2020 | As at 31.12.2019 | Change | |
Bank loans - current | 3,194 | 3,059 | 135 | |
Municipal surtax payables and Iresa | 932 | 2,565 | (1,633) | |
Current financial liabilities for leasing | 585 | 521 | 64 | |
Other current financial debt | 115 | 28 | 87 | |
CURRENT FINANCIAL LIABILITIES | 4,826 | 6,173 | (1,347) |
For a breakdown of the Loans - current portion and other financial payables, reference should be made to account 17 Non-current Financial Liabilities which presents the outstanding Group loans at March 31, 2020 and the changes in the period.
Boarding fee municipal surtax payables and for IRESA concern the portion received by airlines and reversed to the credit institutions in April 2020.
Finally, finance lease liabilities concern the current portion of charges due for third party asset usage rights recognised to non-current assets from January 1, 2019 in application of IFRS 16.
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 65 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
NOTES TO THE MAIN CONSOLIDATED INCOME STATEMENT ACCOUNTS
The principal Q1 2020 income statement accounts are compared with Q1 2019 below.
REVENUES
23. Revenues
The tables below breakdown revenues for the quarters ending March 31, 2020 and 2019.In relation to the performance, reference should be made to the greater detail provided in the Directors' Report.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Revenues from aeronautical services | 9,906 | 13,400 | (3,494) | ||||||
Revenues from non-aeronautical services | 8,029 | 9,794 | (1,765) | ||||||
Revenues from construction services | 2,757 | 4,104 | (1,347) | ||||||
Other operating revenues and income | 119 | 191 | (72) | ||||||
TOTAL REVENUES | 20,811 | 27,489 | (6,678) |
The reclassification of Group revenues based on revenue streams defined by IFRS 15 is shown in the following table:
in thousands of Euro | for the quarter | for the quarter | Change | ||||||
ended 31.03.2020 | ended 31.03.2019 | ||||||||
Airport fees | 8,745 | 11,876 | (3,131) | ||||||
Parking | 2,658 | 3,663 | (1,005) | ||||||
Revenues from construction services | 2,757 | 4,104 | (1,347) | ||||||
Other | 2,385 | 2,770 | (385) | ||||||
TOTAL IFRS 15 REVENUE STREAMS | 16,545 | 22,413 | (5,868) |
The reconciliation between IFRS 15 revenue streams and total revenues (note 24 of the Income Statement) is shown in the following table:
in thousands of Euro | for the quarter | for the quarter | Change | ||||||
ended 31.03.2020 | ended 31.03.2019 | ||||||||
Airport fees | 8,745 | 11,876 | (3,131) | ||||||
Parking | 2,658 | 3,663 | (1,005) | ||||||
Revenues from construction services | 2,757 | 4,104 | (1,347) | ||||||
Other | 2,385 | 2,770 | (385) | ||||||
TOTAL IFRS 15 REVENUE STREAMS | 16,545 | 22,413 | (5,868) | ||||||
Commercial/non-comm.sub-licenses | 4,255 | 5,050 | (795) | ||||||
TOTAL NON IFRS 15 REVENUE STREAMS | 4,255 | 5,050 | (795) | ||||||
TOTAL NON IFRS 15 Revenues | 11 | 26 | (15) | ||||||
TOTAL REVENUES | 20,811 | 27,489 | (6,678) |
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 66 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
- Revenues from aeronautical services
The table below shows revenues from aeronautical services in Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Centralised infrastructure/other airport services | 132 | 230 | (98) | ||||||
Exclusive use revenues | 200 | 299 | (99) | ||||||
Airport fee revenues | 11,492 | 16,165 | (4,673) | ||||||
PRM revenues | 924 | 1,248 | (324) | ||||||
Air traffic development incentives | (3,750) | (5,697) | 1,947 | ||||||
Handling services | 497 | 618 | (121) | ||||||
Other aeronautical revenues | 411 | 537 | (126) | ||||||
TOTAL REVENUES FROM AERONAUTICAL SERVICES | 9,906 | 13,400 | (3,494) |
The breakdown of airport fee revenues is shown below:
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Passenger boarding fees | 5,132 | 7,950 | (2,818) | ||||||
Landing, take-off and parking fees | 4,028 | 4,756 | (728) | ||||||
Passenger security fees | 1,645 | 2,537 | (892) | ||||||
Baggage stowage control fees | 541 | 720 | (179) | ||||||
Freight loading and unloading charges | 163 | 202 | (39) | ||||||
Reduction for provision | (17) | 0 | (17) | ||||||
TOTAL AVIATION FEE REVENUES | 11,492 | 16,165 | (4,673) |
ii. Revenues from non-aeronautical services
The table below shows revenues from non-aeronautical services in Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Commercial premises and spaces sub-license | 3,681 | 4,362 | (681) | ||||||
Parking | 2,658 | 3,663 | (1,005) | ||||||
Other commercial revenues | 1,690 | 1,769 | (79) | ||||||
TOTAL REVENUES FROM NON-AERONAUTICAL SERVICES | 8,029 | 9,794 | (1,765) |
Other commercial revenues are broken down as follows:
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Ticketing | 6 | 10 | (4) | ||||||
Marconi Business Lounge | 486 | 684 | (198) | ||||||
Advertising | 413 | 424 | (11) | ||||||
Misc. commercial revenues | 785 | 651 | 134 | ||||||
TOTAL OTHER COMMERCIAL REVENUES | 1,690 | 1,769 | (79) |
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 67 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
iii. Revenues from construction services
Revenues from construction services concern the construction services undertaken by Aeroporto Guglielmo Marconi di Bologna S.p.A. on behalf of the ENAC granting entity for the capital investments previously commented upon in relation to the Concession Rights in Note 1.
These revenues amounted to Euro 2.8 million in Q1 2020 (Euro 4.1 million in Q1 2019).
iv. Other Revenue and Income
The table below shows other revenues and income in Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Indemnities, reimbursement and misc. income | 119 | 191 | (72) | ||||||
TOTAL OTHER REVENUES AND INCOME | 119 | 191 | (72) |
COSTS
24. Costs
i. Consumables and goods
The table below presents consumables and goods in Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Consumables and goods | 295 | 124 | 171 | ||||||
Maintenance materials | 47 | 64 | (17) | ||||||
Fuel and gasoline | 166 | 237 | (71) | ||||||
TOTAL CONSUMABLES AND GOODS | 508 | 425 | 83 |
This category presents an increase mainly due to the de-icing liquid for aircraft not purchased in the first quarter of 2019 as it was previously the subject of the contract with the handler providing the de-icing service at the airport.
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 68 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
- Service costs
The table below shows service costs in Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Maintenance costs | 1,148 | 1,175 | (27) | ||||||
Utilities | 480 | 530 | (50) | ||||||
Cleaning and accessory services | 517 | 511 | 6 | ||||||
Services | 1,559 | 1,753 | (194) | ||||||
MBL Services | 58 | 79 | (21) | ||||||
Advertising, promotion and development | 164 | 153 | 11 | ||||||
Insurance | 263 | 218 | 45 | ||||||
Professional and consultancy services | 337 | 306 | 31 | ||||||
Statutory board fees and expenses | 235 | 216 | 19 | ||||||
Other service costs | -31 | 72 | (103) | ||||||
TOTAL SERVICE COSTS | 4,730 | 5,013 | (283) |
Total service costs decreased mainly due to:
- reduction of sometraffic-related services such as PRM and MBL;
- containment of utility costs due to the reduced use of certain areas of the terminal, and redrafting of some service contracts, although with minimal impact on the first quarter.
A further breakdown in maintenance expenses is provided below:
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Owned asset maintenance expenses | 255 | 238 | 17 | ||||||
Airport infrastructure maintenance expenses | 744 | 671 | 73 | ||||||
Third party asset maintenance expenses | 149 | 266 | (117) | ||||||
TOTAL MAINTENANCE COSTS | 1,148 | 1,175 | (27) |
The breakdown of services is illustrated below:
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Snow clearance | 167 | 312 | (145) | ||||||
Porterage, transport third-party services | 159 | 149 | 10 | ||||||
PRM assistance service | 254 | 355 | (101) | ||||||
De-icing and other public service charges | 228 | 217 | 11 | ||||||
Security service | 289 | 279 | 10 | ||||||
Other outsourcing | 462 | 441 | 21 | ||||||
TOTAL SERVICES | 1,559 | 1,753 | (194) | ||||||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 69 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
- Construction service costs
Construction service costs concern the construction costs incurred by Aeroporto Guglielmo Marconi di Bologna S.p.A. Group for the capital investments previously commented upon in relation to the Concession Rights in Note 1.
- Leases, rentals and other costs
The following table shows the breakdown of leases, rentals and other costs for Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Concession fees | 935 | 1,400 | (465) | ||||||
Hire charges | 37 | 39 | (2) | ||||||
Rental charges | 21 | 30 | (9) | ||||||
EDP processing charges | 423 | 413 | 10 | ||||||
Other rental & hire costs | 2 | 3 | (1) | ||||||
TOTAL LEASES, RENTALS AND OTHER COSTS | 1,418 | 1,885 | (467) |
Overall, the Leases, rentals and other costs account decreased, mainly due to the lower traffic volumes, on whose basis the concession and security fees are calculated.
- Other operating expenses
The table below shows other operating expenses in Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Misc. and local taxes | 366 | 334 | 32 | ||||||
Fire prevention service contribution | 306 | 312 | (6) | ||||||
Capital losses | 17 | 0 | 17 | ||||||
Other operating expenses | 105 | 119 | (14) | ||||||
TOTAL OTHER OPERATING EXPENSES | 794 | 765 | 29 |
- Personnel costs
The following table shows the breakdown of personnel costs for Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | |||||||
31.03.2020 | 31.03.2019 | |||||||||
Salaries and wages | 4,592 | 4,942 | (350) | |||||||
Social security charges | 1,297 | 1,412 | (115) | |||||||
Severance provisions | 318 | 321 | (3) | |||||||
Retirement pension and similar | 46 | 46 | 0 | |||||||
Other personnel costs | 284 | 424 | (140) | |||||||
TOTAL PERSONNEL COSTS | 6,537 | 7,145 | (608) | |||||||
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 70 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
The reduction in personnel costs derives not only from the reduction in staff numbers (-21 units compared to March 31, 2020), but also from the actions taken to contain one of the main Group costs following firstly the healthcare crisis and subsequently the economic crisis. In particular, on March 21, 2020, the Parent Company launched an Extraordinary Redundancy Fund for all employees, maintaining only the operational services deemed essential, resulting in a significant reduction in the activities of other employees, after using the backlog of holidays and blocking overtime work.
Other personnel costs are broken down as follows:
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Employee canteen | 132 | 160 | (28) | ||||||
Personnel training and refresher courses | 41 | 114 | (73) | ||||||
Employee expenses | 28 | 72 | (44) | ||||||
Other personnel provisions | 67 | 29 | 38 | ||||||
Misc. personnel costs | 16 | 49 | (33) | ||||||
TOTAL OTHER PERSONNEL COSTS | 284 | 424 | (140) |
The average headcount by category in the two periods under consideration is shown below:
Average workforce (No.) | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Executives | 9 | 10 | (1) | ||||||
White-collar | 432 | 419 | 13 | ||||||
Blue-collar | 95 | 102 | (7) | ||||||
TOTAL PERSONNEL | 536 | 531 | 5 |
The headcount at the end of the two periods under consideration was as follows:
Workforce (No.) | As at 31.03.2020 | As at 31.03.2019 | Change |
Executives | 9 | 9 | 0 |
White-collar | 403 | 414 | (11) |
Blue-collar | 92 | 102 | (10) |
TOTAL PERSONNEL | 504 | 525 | (21) |
25. Depreciation, amortisation and impairment
The table below shows depreciation and amortization in Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter | for the quarter | Change | ||||||
ended 31.03.2020 | ended 31.03.2019 | ||||||||
Amortisation/write-downs Concession rights | 1,643 | 1,500 | 143 | ||||||
Amortisation/write-down of other intangible assets | 302 | 273 | 29 | ||||||
Depreciation of tangible assets | 648 | 697 | (49) | ||||||
TOTAL DEPRECIATION AND AMORTISATION | 2,593 | 2,470 | 123 |
The item comprised of Euro 2.6 million of amortisation and depreciation includes Euro 134 thousand of amortisation of leased assets.
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 71 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
26. Provisions for risks and charges
The following table shows the movement of the provisions for risks and charges for the periods ended March 31, 2020 and 2019.
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Provisions for doubtful accounts | 225 | 25 | 200 | ||||||
Provision for renewal of airport infrastructure | 478 | 475 | 3 | ||||||
Provisions for other risks and charges | 4 | 94 | (90) | ||||||
TOTAL PROVISIONS | 707 | 594 | 113 | ||||||
The increase in this item is mainly related to the higher provision for doubtful accounts - for which reference should be made to note 8.
27. Net financial income and expenses
in thousands of Euro | for the quarter ended | for the quarter ended | Change | ||||||
31.03.2020 | 31.03.2019 | ||||||||
Income from securities | 7 | 1 | 6 | ||||||
Other income | 5 | 38 | (33) | ||||||
Discounting income on provisions | 82 | 0 | 82 | ||||||
TOTAL FINANCIAL INCOME | 94 | 39 | 55 | ||||||
Interest expenses and bank charges | (91) | (113) | 22 | ||||||
Discounting charges on provisions | (6) | (173) | 167 | ||||||
Interest charges for discounting of liabilities for leasing | (3) | (9) | 6 | ||||||
Other financial expenses | (1) | (4) | 3 | ||||||
TOTAL FINANCIAL EXPENSES | (101) | (299) | 198 | ||||||
TOTAL FINANCIAL INCOME AND EXPENSES | (7) | (260) | 253 |
Net financial expense improved due to higher financial income for the discounting of provisions and of liabilities. On the other hand, interest expense and bank charges decreased as a result of the lower overall debt.
28. Taxes for the period
The following table shows the taxes for the periods of Q1 2020 and Q1 2019.
in thousands of Euro | for the quarter | for the quarter | Change | ||||||||
ended 31.03.2020 | ended 31.03.2019 | ||||||||||
Current and deferred taxes | (273) | (1,477) | (1,204) | ||||||||
TOTAL TAXES FOR THE PERIOD | (273) | (1,477) | (1,204) | ||||||||
% taxes in the period on result before taxes | 30.57% | 29.40% | 1.17% |
Income taxes decreased mainly due to the lower result before taxes (-Euro 4.1 million).
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 72 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
29. Related party transactions
For the definition of "Related Parties", reference should be made to IAS 24, approved by Regulation (EC) No. 1725/2003.
Intercompany transactions are carried out within the scope of ordinary operations and at normal market conditions. Related party transactions principally concern commercial and financial transactions, in addition to participation in the tax consolidation.
None of these have particular economic or strategic significance for the Group, as the receivables, payables, revenues and costs regarding related parties do not account for a significant percentage of the total financial statement amounts.
The Bologna Chamber of Commerce shareholders were identified as a Government party, therefore exempt from the disclosure regarding related parties as defined by IAS 24. The categorisation of the Bologna Chamber of Commerce as a Government party therefore limited the checks required for the identification of related parties to the mere identification of the Bologna Chamber of Commerce. No additional information is reported in the financial statements concerning transactions undertaken by the Group with the Bologna Chamber of Commerce as no significant transactions are undertaken with this shareholder.
No transactions with related parties are reported in the period other than the inter-company transactions presented below.
Commercial transactions between the Parent Company and the subsidiary Tag Bologna Srl, in terms of receivables, principally concern the twenty-yearsub-concession of the General Aviation traffic, in addition to certain staff services, personnel secondment and directors' competences for Euro 23 thousand.
Adb payables to the subsidiary mainly concern the capital grant for the covering of General Aviation terminal infrastructure operation and maintenance costs for the boarding and disembarking of passengers, against the financial advantage for AdB of including these costs in the calculation of passenger boarding fees. Costs in the first quarter of 2020 to the subsidiary overall amount to Euro 45 thousand.
Non-commercial transactions with Tag concerned:
- the tax consolidation contract renewed in January 2018 for the years2018-2020;
- the patronage letter issued by the Parent Company, in favour of Monte dei Paschi di Siena relating to thelong-term loan granted by the bank to Tag. At March 31, 2019, the guaranteed portion of the loan, equal to the residual capital portion, amounts to Euro 3.3 million.
During the period, commercial transactions between the Parent Company and the subsidiary Fast Freight Marconi Spa concern the provision by AdB of the following services:
- sub-concessionof offices, areas and operating rooms;
- management and staffing, including the following staff services: accounting, administration, finance, operating control, management reporting, personnel, legal, ICT, personnel secondment and directors' competences;
- packages and goodsx-ray controls.
Revenues in the first quarter of 2020 to the subsidiary overall amount to Euro 99 thousand.
The non-commercial transactions with FFM include the tax consolidation contract renewed in January 2018 for the years 2018-2020.
Types and management of other risks
With regards to the disclosure concerning the types and means of financial risk management under Article 2428, paragraph 2 No. 6 bis, reference should be made to the specific section of the Directors' Report, also with regards to the comment upon the other risks to which the Group is subject.
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 73 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
SUBSEQUENT EVENTS AND BUSINESS OUTLOOK
No events have occurred subsequent to year end that would require changes in terms of the presented performance or equity and financial position and that would therefore necessitate adjustments and/or additional disclosures in the financial statements.
The Chairman of the Board of Directors
(Enrico Postacchini)
Bologna, May 15, 2020
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 74 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
Annex 1
Statement pursuant to Article 154-bis,paragraph 2 of the C.F.A.
Interim Financial Report at March 31, 2020
The officer in charge of preparing the corporate accounting documents, Patrizia Muffato, hereby declares, pursuant to paragraph 2 of article 154-bis of the Consolidated Finance Act (CFA), that the accounting information contained in this Report corresponds to information contained in the accounting documents, registers and entries.
The officer in chargeof preparingthe corporate accounting documents
(Patrizia Muffato)
Aeroporto Guglielmo Marconi di Bologna S.p.A. | 75 |
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail
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Aeroporto Guglielmo Marconi di Bologna S.p.A. published this content on 21 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 May 2020 12:59:03 UTC
