Fraport Posts 66 Percent Gain in 3rd-quarter Net Profit

Fraport AG said Tuesday its third-quarter profit rose 66 percent on higher sales from security services, retail operations and parking, as well as one-time gains. The airport operator boosted its outlook for the rest of the year.

The Frankfurt-based operator of six airports in Europe, Turkey and Peru earned euro102.8 million (US$131.89 million) in the July-September period compared with euro62.1 million a year earlier, beating the euro77 million (US$98.79 million) prediction of analysts polled by Dow Jones Newswires.

Revenue was up 3.9 percent to euro582.3 million (US$747.09 million) compared to euro560.3 million in 2005, exceeding market expectations for euro577.8 million (US$741.32 million).

That increase came despite Fraport losing a number of U.S. military flights after the U.S. Air Force transferred all of its operations from the Frankfurt Rhein-Main airport to Ramstein Air Base.

Fraport said it now expected its 2006 net profit to increase by some 30 percent and total revenue for the year to rise some 2 percent from 2005. Previously, the company said only it expected a double-digit increase.

Last year, the company earned euro161.5 million on revenue of euro2.08 billion.

But Chairman Wilhelm Bender said that while the figures were gratifying, the company faced "new and growing challenges." He said modernizing facilities, including expansion at Frankfurt to accommodate the now-delayed Airbus A380 superjumbo, along with renovations at the other airports, would have to be dealt with.

Chief Financial Officer Stefan Schulte said the delay in the A380 - Fraport is building a terminal and facilities designed solely for the plane - meant that the expected increase in passengers at Frankfurt next year wouldn't take place. Fraport had expected to have another 30,000 passengers each month from flights using the new plane.

But he said the company still expected to see a moderate increase in overall passenger traffic in 2007.

He also said Fraport is debating whether to make an offer for the Abu Dhabi Airport in the United Arab Emirates, even though it has not been up for sale. Once the tender process for the facility begins, Fraport will examine it and decide whether to make a bid.

As for its plans to take stakes in airports in China, Schulte said no contracts dealing with that would be signed before the end of 2006. In September, Fraport's Chief Executive Wilhelm Bender said he hoped to finalize the acquisition of stakes in two Chinese airports in the next few months.

In the first nine months of 2006, passenger traffic at the six airports was up 1.5 percent to 56.3 million.

Shares of Fraport were up half a percent to euro55.83 (US$71.63) in Frankfurt.


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