KØBENHAVNS LUFTHAVNE A/S Stock Exchange Announcement
The Board of Directors has today approved the interim report for the period 1 January –
Summary of first nine months of 2020
Some 6.7 million passengers passed through the terminals at
The dramatic drop in passenger numbers took a toll on CPH’s results for the first nine months of the year. CPH derives most of its earnings from two main sources. One is traffic, which is driven by the number of departing passengers. The other is the shopping centre and the commercial activities, which have been severely reduced due to the low passenger numbers. This is severely impacting earnings, and CPH has used its bank facilities to keep the airport in operation since the COVID-19 outbreak, although CPH did make use of the government’s support packages.
CPH generated a loss before tax of
In
Summer optimism was short-lived
CPH’s financial performance is a reflection of the fact that large parts of the airport’s activities were virtually at a standstill in March and the following months. Rows of parked aircraft, closed shops and deserted terminals were the new reality during the spring months. In mid-June, the European aviation authorities introduced new protective equipment, hygiene and social distancing guidelines for airport travellers and staff. At the same time, a number of European countries successfully contained the spread of COVID-19, prompting many countries to allow travel again.
While this led to increasing passenger numbers over the summer period, travel demand was still materially below normal levels. In the first week of June, there were scheduled flights to and from 18 destinations. By August, the number of destinations had gradually increased to around 100. The many destinations notwithstanding, passenger numbers during the three summer months were still down by 80-85% from the summer of 2019 due to significantly reduced frequencies within the routes offered. For the period January to
In the third quarter, in response to COVID-19 flare-ups across the European continent, travel guidelines were tightened anew, triggering another sharp drop in passenger numbers. The hope shared across the industry of a gradual recovery of air traffic in the course of the second half of the year was extinguished as travel guidelines were tightened week after week. This affected not just CPH's core business at the airport, but the entire Danish tourism industry and had far-reaching implications for many people, who lost their jobs and income base. CPH has also had to let go of many highly skilled colleagues as a result of the crisis. At the end of August, CPH had to make the very difficult decision of initiating large redundancies. 625 full-time positions were cut through dismissals, elimination of vacant positions and voluntary resignations.
These job cuts in August reduced annual operating costs at the airport by about
Additional cost measures due to dramatic drop in passenger traffic
In addition to the above-mentioned measures and as a result of the significant decline in passenger traffic in recent months, CPH has decided to launch further cost-saving initiatives. Among other things, this will be done by using the government’s scheme for distribution of work as well as increasing supplementary training and upskilling of employees. In addition, it is expected that it will be necessary to do further redundancies. Together, the initiatives will provide an additional annual saving corresponding to approximately 325 full-time positions. However, the major part of these savings is expected to be found through the distribution of work scheme and education initiatives, and not redundancies.
Quick testing is key to restarting air traffic
However, cost reductions are not enough to turn the current red figures into black. A genuine restoration of air travel requires more fundamental measures, when the current COVID-19 flare-up is under control. For this reason, under the auspices of the government’s restart teams, CPH has worked to establish a testing solution requiring passengers arriving in
Sustainable transition has not lost momentum despite COVID-19
Despite the plummeting passenger numbers and the work to restore air traffic in the wake of the coronavirus pandemic, CPH has maintained its strong focus on the sustainable transition of aviation and CPH.
In the second quarter, under the auspices of the Climate Partnerships, CPH and the rest of the aviation industry presented the industry’s recommendations for its sustainable transition. Shortly after, CPH and a number of other major Danish companies teamed up with the
The partnership continued working on the project in the third quarter, applying for financial support from Innovation Fund Denmark which – in combination with a triple-digit amount in millions of Danish kroner from the participating companies – will lay the groundwork for the launch of the first stage of the project, which may be ready in 2023.
Furthermore, in the beginning of October a consortium led by CPH in collaboration with 14 other European partners and the
Highlights
- The number of passengers at Copenhagen Airport was 6.7 million in the first nine months of 2020, a 71.3% drop from the same period last year that was due to COVID-19. The number of locally departing passengers was 2.7 million (71.4% fewer than last year), while transfer and transit passengers numbered 0.6 million (73.1% fewer than last year).
- Revenue amounted to
DKK 1,325.0 million (2019:DKK 3,298.9 million ), a 59.8% decline from last year primarily due to the COVID-19.
- EBITDA was similarly affected and amounted to
DKK 285.0 million (2019:DKK 1,847.0 million ), corresponding to an 84.6% decline from last year.
- EBIT was a loss of
DKK 366.4 million (2019:DKK 1,163.7 million profit), corresponding to a decrease ofDKK 1,530.1 million .
- Net financing costs were
DKK 11.2 million lower than last year primarily due to lower average interest rates.
- Profit before tax fell by
DKK 1,518.9 million to a loss ofDKK 453.6 million (2019:DKK 1,065.3 million profit).
- Capital investments were
DKK 1,229.0 million in the first nine months of 2020 (2019:DKK 1,601.4 million ). Investments in the first nine months of the year included the expansion of Terminal 3, the completion of Pier E, construction of a multi-storey car park, new baggage facilities, various IT systems as well as miscellaneous improvement and maintenance work.
Outlook for 2020
The loss for the first nine months of 2020 should be seen in light of the sharp decline in revenue from both aeronautical and the non-aeronautical parts of CPH’s business as a consequence of COVID-19. The small increase in traffic during the summer was short-lived and during the third quarter travel guidelines were tightened anew, triggering another sharp drop in passenger numbers. This was followed by further restrictions post the balance sheet date.
Based on year-to-date financial developments in 2020 and the prospects of very limited passenger traffic for the rest of the year, CPH expects a significant revenue drop relative to 2019. Given the cost of keeping the airport operational, CPH narrows the expectations and expects an overall loss after tax of
Continued focus on maintaining liquidity and organising operations more efficiently
Significant actions with positive effect on performance have been taken by the management in CPH including substantial cost reductions. In 2020, this has amounted to more than
Furthermore, CPH has initiated adjustments in the organisation to the activity level expected for the foreseeable future, as described in the company announcement of
P.O. Box 74
Lufthavnsboulevarden 6
2770 Kastrup,
Contact:
CFO
Tel.: +45 3231 3231
Email: cphweb@cph.dk
www.cph.dk
CVR no. 14 70 72 04
Attachment
- Q3 2020 Announcement to the
Copenhagen Stock Exchange
© OMX, source
