Fraport Fiscal Year 2016 - Fraport Achieves Positive Performance Despite Challenging Business Environment

Frankfurt (ots) -

- Cross-reference: A PDF version of this press release is
available at http://www.presseportal.de/dokumente -

Record financial result achieved due to Manila compensation
payment - Airports in Fraport's international portfolio report mixed
results

Fraport AG looks back on a successful 2016 business year (ending
December 31), which was marked by a record financial result achieved
despite challenging framework conditions for the aviation industry
and slightly declining traffic at the Group's Frankfurt Airport home
base.

Group revenue declined by 0.5 percent year-on-year to EUR2.59
billion. Adjusting for changes in the scope of consolidation due to
the sale of shares in Fraport Cargo Services (FCS) and the disposal
of the Air-Transport IT Services subsidiary, Group revenue would have
risen by EUR46.2 million or 1.8 percent. This resulting increase in
revenue (on an adjusted basis) was stimulated in particular by the
ongoing growth at the Group's airports in Lima (Peru) and Varna and
Burgas (Bulgaria), as well as at the Fraport USA subsidiary, and by
revenue gained from property sales.

The Group's operating profit or EBITDA (earnings before interest,
taxes, depreciation, and amortization) advanced by 24.2 percent,
reaching a new record high of EUR1.05 billion. This strong growth
was supported by the compensation payment received for the Manila
terminal project, which boosted EBITDA by EUR198.8 million.
Fraport's successful sale of a 10.5 percent share in Thalita Trading
Ltd., the owner of the operating company of Pulkovo Airport in St.
Petersburg (Russia), contributed another EUR40.1 million to EBITDA.
Adjusting for these effects and the creation of provisions for a
personnel-restructuring program, the Group's EBITDA would have
remained on the previous year's level of about EUR853 million.
Although this adjusted EBITDA was curbed by previous year's weaker
traffic performance and a slowdown in FRA's retail business,
reflecting lower spending by passengers, the Group's external
business also had a compensating positive effect on EBITDA.

The Group result (net profit) increased by 34.8 percent to
EUR400.3 million. Without the aforementioned effects and unscheduled
depreciation and amortization, Fraport's Group result would only have
reached about EUR296 million. In contrast, operating cash flow
declined by 10.6 percent to EUR583.2 million. Likewise, free cash
flow contracted by 23.3 percent to EUR301.7 million, also due to
ongoing construction of Frankfurt Airport's future Terminal 3.

Traffic at the company's Frankfurt Airport (FRA) home-base
slightly declined by 0.4 percent to approximately 61 million
passengers in 2016. This was, in particular, a result of the
relatively weak spring and summer months characterized by markedly
restrained travel bookings in the wake of geopolitical uncertainties.
In the last quarter of 2016, traffic figures noticeably rebounded,
even reaching a new December monthly record. Cargo tonnage expanded
by 1.8 percent to some 2.1 million metric tons, helped by the
economic recovery in summer 2016.

Fraport's international portfolio of airports displayed mixed
results in 2016. The strong 30.9 percent decline in traffic at
Antalya Airport (AYT) in Turkey - which was impacted by the country's
geopolitical and security situation - could be largely offset by the
traffic performance of Group airports at other locations. Strong
growth was recorded in particular at Lima Airport (LIM) in Peru (up
10.1 percent), Burgas Airport (BOJ) and Varna Airport (VAR) on the
Bulgarian Black Sea coast (up 22.0 percent and 20.8 percent,
respectively), and Xi'an Airport (XIY) in China (up 12.2 percent).

On the basis of the Group's positive financial performance, a
dividend of EUR1.50 per share will be recommended to the 2017 Annual
General Meeting. This corresponds to an increase of EUR0.15 or 11.1
percent per share and to a payout ratio of 36.9 percent of the Group
result attributable to shareholders.

Commenting on Fraport AG's business performance in 2016, executive
board chairman Dr. Stefan Schulte stated: "Despite the challenges of
the 2016 business year, we have achieved our best annual result ever.
The sale of the 10.5 percent share in our Pulkovo Airport subsidiary
in St. Petersburg has demonstrated that we are able to develop
international airport concessions even amid difficult market
environments. We will therefore continue to consistently pursue our
strategy of operating a broadly diversified international portfolio."

For the 2017 business year, Fraport expects traffic at Frankfurt
Airport to grow by 2 to 4 percent. Revenue is anticipated to see a
noticeable increase up to approximately EUR2.9 billion, backed by
positive traffic growth both at Frankfurt Airport and Fraport's
international Group airports. Also the expected consolidation of the
Group's activities in Greece will contribute to a marked rise in
revenue. The Group's operating profit (or EBITDA) is forecast to
reach a level of between approximately EUR980 million and EUR1,020
million, while EBIT is expected to be between approximately EUR610
million and EUR650 million. The Group result is anticipated to reach
between EUR310 million and EUR350 million.

Regarding the Group's business outlook for 2017, CEO Schulte said:
"We are optimistic about the current business year and expect
Frankfurt Airport's traffic to grow both in the low-cost segment and
the traditional hub traffic. At the same time, we will continue to
strategically develop our international business. By taking over the
operation of the 14 Greek airports, we will unleash further growth
potential."

In view of the expected long-term traffic growth at Frankfurt
Airport, construction of the new Terminal 3 is being pushed forward
as scheduled, with the first construction phase expected to be
completed by 2023. The focus of Fraport's international business is
currently on the take-over of operations at the 14 Greek airports,
which is expected to take place in the next few weeks.

Overview of Fraport's four business segments:

Aviation:

Revenue in the Aviation business segment declined by 1.8 percent
to EUR910.2 million in business year 2016. This was largely due to
the slight drop in passenger traffic at Frankfurt Airport, the loss
of the tender to perform security services in Concourse B, and lower
revenue from the re-allocation of infrastructure costs. The creation
of provisions for a personnel-restructuring program, higher wages in
business year 2016 due to collective agreements, as well as higher
non-staff costs let the segment's EBITDA decline by 8.3 percent to
EUR217.9 million. Depreciation and amortization increased
significantly year-on-year, particularly due to the full unscheduled
depreciation and amortization of the goodwill in the FraSec GmbH
subsidiary in the amount of EUR22.4 million, as a result of the
company's lower long-term earnings forecast compared to previous
years. Correspondingly, the segment's EBIT significantly dropped by
39.5 percent to EUR70.4 million.

Retail & Real Estate:

Revenue in the Retail & Real Estate segment edged up 1.2 percent
to EUR493.9 million in business year 2016, despite the slowdown in
the retail sub-segment. Revenue performance was positively affected
by sales of land and the changed presentation of rental income due to
changes in the scope of consolidation related to sale of shares in
the Frankfurt Cargo Services (FCS) subsidiary. Net retail revenue
per passenger was at EUR3.49 (2015: EUR3.62). The decline was
attributable to a lower average spend by passengers from China,
Russia and Japan, as well as the impact from the depreciation of
various currencies against the euro. With EUR368 million, the
segment's EBITDA was down 2.9 percent on the previous year, largely
as a result of higher personnel expenses. These were attributable, in
particular, to higher demand for manpower, rising wages set by
collective agreements, and the creation of provisions for a
personnel-restructuring program. With depreciation and amortization
almost flat, the segment's EBIT reached EUR283.6 million (down 3.9
percent).

Ground Handling:

In the 2016 business year, revenue in the Ground Handling business
segment markedly decreased by 6.3 percent to EUR630.4 million
compared to the previous year. This was due, in particular, to the
sale of shares in the Fraport Cargo Services (FCS) subsidiary and
slightly declining passenger traffic at Frankfurt Airport. Adjusted
for the effects from the sale of shares in FCS, segment revenue saw
underlying growth of 1.8 percent. Reasons for this adjusted increase
included a change in the presentation of personnel expenses as a
result of changes in the scope of consolidation related to the sale
of shares in the FCS subsidiary, as well as slightly higher revenue
from infrastructure charges. The creation of provisions for a
personnel-restructuring program and rising wages due to collective
agreements led to a 25.2 percent decline in the segment's EBITDA to
EUR34.7 million. Contracting by EUR11.5 million to minus EUR5.5
million, the segment's EBIT reached negative territory due to the
provisions for the personnel-restructuring program.

External Activities & Services:

Revenue in the External Activities & Services business segment
increased by 8.1 percent to EUR551.7 million in business year 2016,
supported in particular by the Group companies in Lima, Peru (up
EUR27.8 million), Twin Star, Bulgaria (up EUR9.9 million) and Fraport
USA Inc. (up EUR3.2 million). In addition, the compensation payment
from the Manila terminal project and revenue gained from the sale of
shares in Thalita Trading Ltd. had a markedly positive impact on the
segment's revenue. Due to these effects, also the segment's EBITDA
more than doubled, reaching EUR433.5 million (2015: EUR186.1
million). The segment's EBIT showed similar growth, rising by
EUR242.1 million to EUR345.2 million.

For further information about Fraport AG please click here:
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Contact:
Fraport AG
Mike Peter Schweitzer
Corporate Communications
Press Office
60547 Frankfurt, Germany
Telephone: +49 69 690-70555
E-mail: m.schweitzer@fraport.de
Internet: www.fraport.com
Facebook: www.facebook.com/FrankfurtAirport

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