Flughafen Wien AG
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So ladies and gentlemen, welcome to our conference call for the first quarter of 2022 of Vienna Airport. Today's presentation will be held as usual by our Board members, Mr. Günther Ofner and Mr. Julian Jager. [Operator Instructions]
The call will be recorded and will be available on our website shortly. And the slides of the presentation that will be held now are also available on our website under the menu Presentations. And now I would like to hand over to our CFO, Mr. Ofner. The floor is yours, sir.
Yes. Good afternoon and good morning to those on the other side of the globe. I can present you today our results for the first quarter of '22. And as you might have already seen in our presentations and in our press release, the results are significant better than last year. And this is due to higher passenger figures, 3.7 million in our group, which, on the one hand, still is only half of what was in 2019, but is much more than it was last year. And therefore, also our financial results are significantly better, not only in revenue, but also in net profit, and we can report the net profit for the first quarter at roughly EUR 6.7 million.
As autumn and winter of '22 still contain a lot of uncertainties, we have not changed our guidance so far. But if the drastic development continues to outperform in comparison to what we have budgeted, we would definitely see a significant positive effect on the results for '22. And we will, at the latest, with half year results, reassess our guidance for '22. But I would generally say that all [ aux ] tell us that it should be a positive year above initial expectations.
In regard of the revenues, you see on the next slide that we had EUR 110.9 million. That's more or less doubling the revenue of last year's first quarter. And earnings before interest, tax and depreciation and amortization went up to EUR 46.3 million, which clearly is very, very significant above the respective EUR 2.4 million of last quarter -- last year's first quarter.
Our EBIT was positive at EUR 12.4 million compared to minus EUR 30.1 million (sic) [ EUR 30.9 million ] last year. And the financial results at minus EUR 3.4 million, slightly better than last year. So altogether, earnings before tax is at EUR 9 million, and net profit for the period at EUR 6.7 million.
What has to be mentioned in regard of our net result is that it includes the roughly EUR 8 million we got from the sale of a major piece of land nearby the airport. We initially thought it would be already a part of our '21 balance sheet, but the whole procedure took longer. So we had to book it now in the first quarter.
In regard of expenses, we see that clearly costs are going up again, parallel through traffic and the overall positive development. And if we look at consumables and services used, we especially feel also there are increases on the energy side. But for the rest of the year, we will see that this effect is much less because today, we had the opening ceremony for our new, big photovoltaic plant. And we will -- are already producing roughly 300,000 kilowatt hours electricity per day.
So on a sunny day like today, the whole airport and all the companies that are operative at the airport are supplied by solar electricity, and we can even feed back some portions to the network. And this will be very supportive for the rest of '22 in regard of energy costs.
Our personnel expenses clearly are going up from EUR 39 million to EUR 51.5 million. And the effects are in quarter 1, '22. On the one hand, that more passengers need more workforce. But still, we have profited in the first 3 months from the short work program. I mean much less than last year. But still, we had a reimbursement from this program, but we had to cancel the program end of March. So this effect will not be feel-able for the rest of the year.
Other operating expenses are also up. Impairments are not significant, and depreciation and amortization is more or less at the level of last year.
One question from your side was to what extent we could already liquidate the receivables for the short-term program. Unfortunately, we have not had a significant progress in that regard. So in regard of the cash flow, we only got some payments for May last year. So altogether, more than EUR 60 million still are not paid out. I mean there is no threat that we will not receive this money, but it's unfortunately a complicated and painful procedure. And it will take some more time unless we will receive these payments, but there is no reason to expect that we will not receive them.
Our net debt position is almost unchanged at EUR 145 million, and gearing is still very low. Cash flow from operating activities is positive. Free cash flow, still minus. CapEx was considerably low in the first quarter as usual.
Equity at EUR 1.320 million is slightly better than it was before. And the equity ratio, 64.8%, reflects that our balance sheet is shrinking due to the fact that we have substantially cut down our investment in the last 2 years.
So overall, I would say the worst is behind us, and we are in a very good and stable position in regard of our balance sheet and financing. And I think all the negative effects we had to digest from corona are now more or less incorporated in our books, and we are looking at better summer and hopefully will not see a return to lockdowns later this year.
The share prices of airports in general are still suffering, and that's the same for our shares. On the other hand, we are again outperforming our major peers. And hopefully, I'm rather optimistic because I think that the market should see that the worse is over for the travel industry and especially also for the airport, and we can restart from a lower cost base into new growth periods.
I already mentioned our financial guidance. What I would add is that our expectation for the net debt development is that we will be below EUR 50 million and CapEx should be somewhere around EUR 84 million, already including our photovoltaic project. I already mentioned it, and if you are here by Vienna sooner or later, I think you should have a look at it. It's really big. And it looks very, very great. And it's a highly profitable investment, given the extreme energy prices right now. But it's also a very important cornerstone on our way to CO2 neutral airport operation, what we definitely will realize for '23, so much earlier than we initially expected.
And I think in all major aspects, we are fully in line with our sustainability and energy efficiency programs, and we are even selling the know-how we developed in the last decade to other companies because many of them are far behind. And I think we have very valuable know-how for other airports, but not only airports, also for train stations, for business centers, for clinics and other big infrastructures.
I'm right now, as you might see, sitting in my car. And the car is standing outside the new cargo [ Vienna ] of Swissport, which is also opened today 8,000 new square meters, new cargo facilities. And altogether in the SkyLog Park, roughly 25,000 square meters of logistic facilities have gone operational just in these days. So we see a very big interest of companies to use the airport and our facilities.
And as you see with the one-off effect of selling a piece of land here, it's substantially contributing to our business results, and the development will continue for the coming years as we see tremendous interest from logistic companies to settle down at the airport.
So that's from my side, and I hand over to you, Julian, for the traffic results.
Hi. Good afternoon, ladies and gentlemen. Yes. Let me start with a quick look at the traffic development in the first quarter. Overall, we had 3.7 million passengers in our group; Vienna airport, 2.9 million; Malta, 700,000; and Kosice, about 100,000 passengers, which was obviously a major improvement over the disaster in '21, where we had 0.7 million passengers in the first quarter.
We had -- just looking at Vienna now, we had 30,000 flight movements versus 10,000 flight movements in the first quarter of last year. The development in the passengers, so local passengers, recovered a bit better than the transfer passengers. Seat load factor was significantly better than last year but still significantly behind the 2019 figures with 62.4% load factor. And cargo was essentially on the same level as last year and 8% below the 2019 figures.
Having a look at the share of the airlines, you'll see here that Austrian had a relatively low share in the first quarter of 2022. The good thing is that the share has significantly improved since then. So in April, the share was already at about 48%. So the market share of Lufthansa Group in April was around 50% or a bit more. So the first quarter is not is not a sign or -- that the full year will look quite significantly different from the first quarter.
So in the first quarter, Lufthansa Group at 45%; low cost, 36%. So I would assume for the full year, Lufthansa Group will go significantly up towards the 50% and the low-cost carrier will go down towards roughly 30%. This is attributed to a very significant capacity reduction from Austrian Airlines in the first quarter. But with the summer schedule, things improved there quite significantly.
April was, yes, significantly better than what we expected a couple of months ago. We were at 65% compared to the 2019 figures. And I said it already a couple of times, at one point in the future, we will have to get rid of the constant comparison with 2019. So far, still, I think it gives a good idea where we stand. Everyone has obviously to remember that 2019 for us was an exceptional year, but I think we are in a good way right now and may improve on top of that even a bit further so far. So overall, we are very optimistic now for Q2 and Q3. Obviously, nobody knows what's going to happen in autumn, but so far, things are looking good.
What we still see, and this was still very visible in April, is that the traffic to Germany and Switzerland is lagging significantly behind. We were at minus 50% compared to 2019 figures in Germany and in Switzerland. So it seems that the business traffic in the so-called DACH area is not recovering yet. I hope that this will change in the course of the year. I think this would give us another major push in terms of traffic recovery. But so far, we see that our traffic to Zurich and the whole of Germany is lagging behind quite significantly.
We saw something similar with the U.K. up until the end of March. So I think in the U.K., which was always -- where we saw a reduction in traffic compared to pre-pandemic levels, we saw a very strong recovery now in April. And I think the reductions in the past were attributed to the very strict COVID restrictions in the U.K. But now traffic is recovering, essentially in line with the rest. Germany is still lagging behind.
Seat load factor was a healthy 73%, so 4.8 percentage points below 2019 figures. So even there, we are in a good way. And one has to mention as well that the average number of seats per flight increased quite substantially towards 2019 as well. So overall, I think we are on a good way there. And cargo was essentially on the level of 2021 and 7% below 2019 figures. So overall, I think we are in a good way here.
Looking at the summer schedule, we estimate that in the peak season, we will be plus/minus 80% of the seats of 2019. Obviously, we don't know about the load factors yet. I think this is something we will still have to see. And one thing, and this is another reason why we would like to get a better taste of the June and probably July traffic before we come out with a new forecast for the full year. We still -- we are still not sure if the partly very ambitious flight plans of some airlines will actually materialize. So we feel that there is a lot of revision in the market, and we intend to put a lot of seats in the market. We are yet not sure if this will materialize as we see the flight plans today. So there's still a question mark on the peak season traffic. But overall, obviously, yes, we are above our projections, and we hope that the rest of the year will be the same.
Austrian offers 110 destinations and 1,300 weekly frequencies. Ryanair out there with a lower number of frequencies per destination but over 90 destinations. Overall, we can say that the south of Europe is extremely strong on the levels of 2019, partly above it. We see now a new Los Angeles service. And overall, I can say that the European routes are doing very well, mainly to the south. North America doing extremely well. We don't see a major impact here from the war in Ukraine on demand yet. At least, this is what the airlines are telling us. We see a very strong recovery from the Arabian Peninsula. And you see here that flynas [indiscernible] Vienna, Kuwait, areas [indiscernible] Vienna. Jazeera Airways are expected to start the operation end of June. So overall, I think this is a very healthy development. Condor started again to offer some leisure destinations. So overall, things are looking really good for the time being.
Yes. As Günther said already, for the time being, we stick to our forecast. We -- but definitely, at the latest by mid-August when we come out with our H1 results, probably earlier, we will update our passenger forecast and we will update our financial forecast for the full year 2022. So far, the year develops above our expectations. Let's keep our fingers crossed that it stays like that. And as we said, we will come out with an update in the months to come.
Looking a bit at the segment results. Airport, very significant improvement over last year, although EBIT was still in the negative territory, minus EUR 7 million EBIT, plus EUR 13 million EBITDA, external revenue of EUR 49 million. Obviously, there's a high element of fixed cost in the Airport segment. So I would assume that in Q2, we are moving in positive EBIT territory there as well. Very significant increases in all the revenue segments. Aircraft-related fees, plus 160%; passenger-related fees, plus 400%; infrastructure, plus 30%. So overall, I think a very positive development.
We've improved our structure very significantly as well. So we used the time of the pandemic to refurbish our Terminal 2. The oldest part of the Terminal 2 went into operation in 1960. We improved, I think, our lounge tremendously. I just can recommend to come to Vienna and have a look at our new VIP lounge there.
What is very important from an operational perspective is our new security area. What surprised us that we managed to increase the peak throughput in the security area by close to 50% compared to our other security -- centralized security area in Terminal 3. We have now 2 centralized security areas, Terminal 3 and Terminal 2. I think in general, Vienna is very good in terms of waiting time and performance in security compared to most other airports in Europe, but Terminal 2 really exceeded our expectation. And this gives us, yes, a certain hope that even in the peak of summer, waiting times will be very significantly below the European average.
I think what worries everybody in the industry is the summer performance in terms of operations. I think many airports have not enough stuff in ground handling, in security. I think ATC will be a problem in summer. So we feel that compared to most airports, we are very well positioned to keep problems as minimal as possible. Obviously, yes, it's difficult for us as well to hire additional security staff. I think we are in a very good way in terms of ground handling. But overall, it could be that the waiting times are longer in summer than they are now. But what we can see is when we compare ourselves with other airports, and informally, we get some information from our airlines as well, I think we are very well positioned in terms of punctuality. We were the most punctual hub in the European Union last year according to OAG data. Obviously, we want to repeat this year. And what we've seen so far is that already now in April and May, a lot of airport struggled, and there are huge queuing times in security. And we don't have any problems so far, so we are really confident that we will have an excellent performance here in summer as well, at least compared to most other airports in Europe.
Obviously, if the system as a total is in trouble, this will be a problem for us as well. And coming back to our forecast, this is why we are still a bit hesitant to come out with additional figures. We really want to see how the additional capacity, which will come online now in the coming weeks, if this will actually materialize. But overall, it could be that it's really in terms of operational performance, it will be a difficult summer at many airports and for ATC as well. So I think as an airport system in Vienna, we have to prepare ourselves for the one other external shock, and we will try to absorb these problems with our operational excellence as much as possible.
Coming to our handling and security services. Here, we saw an increase by 50% in terms of external revenue. Our ground handling revenue increased by 109%. EBITDA was positive with EUR 3.2 million, and EBIT was slightly positive with EUR 0.9 million. The revenue in cargo handling decreased by 8%. Ground-handling grew by 100%. Passenger handling, this is mainly due to the low-cost carriers, plus 360%. Security services, plus 15%. So overall, I think a positive development as well.
Retail, here, we saw an increase from EUR 17 million to EUR 22 million, plus 30%. But what you have to remember here as well, and this explains the relatively modest increase in center management and hospitality revenues, we had a significant one-off last year of roughly EUR 4 million, which pushed revenues last year up. So overall, the operational performance is significantly better than last year. Rentals are at the same level of last year, and parking is up by 160%. So overall, we had an EBITDA of EUR 20 million and an EBIT of EUR 15 million.
I think looking at the center management and hospitality, it's still the case that overall, those airlines we'll operate have an increase in average sales in the duty-free shop compared to 2019 figures. But obviously, we miss now not only the East Asians, the Chinese, but also the Russian passengers and the passengers from Ukraine. So overall, duty-free is in line with passenger development, but obviously, could be much better if we would have still these high spenders. We really miss our high spenders in the specialty retail area, so fashion and accessories. This is an area where we are struggling and where we don't manage to increase revenues in the same -- in line with passengers. The same applies for banking and exchange. But on the other hand, F&B is in line with passengers here and there, even a bit above. So overall, we are happy with the performance given the circumstances.
What we are trying to do is as well to give some more local flavor. So the -- a couple of new F&B offerings at Vienna Airport coming online. We've got a new Trzesniewski, which is a very local Viennese brand. Aida opened a new cafe. We are adding [ Bidenmaya ], a new coffee shop as well, Veganiste, some local heroes. Wolfgang Puck opened yesterday with Wolfgang Puck being present here as well. So overall, I think the development here will be excellent in the months to come.
And finally, Malta is doing very well as well. We had an external revenue, which more or less doubled by close to EUR 11 million from EUR 5 million. EBITDA was EUR 4.5 million. And EBIT, EUR 1.1 million. April was already very good. We had a strong Easter there. I think overall, the outlook here for summer is very good as well. So overall, we are happy with the development of Malta as well.
And yes, we -- as I said, we keep our fingers crossed that the rest of the year will be a positive surprise as well, and we will come with our new projections in the month to come at the latest by mid of August.
That's it from our end, and we are happy to answer now your questions.
Thank you, gentlemen, for your presentation. Thank you, Mr. Ofner. Thank you, Mr. Jager. I would now like to open the floor for questions. [Operator Instructions]
[indiscernible].
Yes, go ahead.
Some questions I have with respect to headcount planning. First, I assume that the number of average headcount you publish is not affected by the quarter of short-term work. So that's the FTE calculation we usually know within short-term work, has no influence. Is this correct? With the 4,500 people you're showing the report like this.
This is -- go ahead. I will...
Yes. It does not take into account any short-term work quarter of the workforce?
No, no, not in the count per head. It's -- I think it's more or less the same what was at the beginning of the year. So in the first 3 months, there was not a significant change, but it's more than 1,000 people less than it started the beginning of '20. And for the full year, I mean in parallel to the expansion of passenger numbers, we will see some additional headcount. But...
Please, there are 3 other question, question 1, yes.
Yes. Overall, we are now at roughly 80% of the level of 2019 in regard of workforce. So still, there is some productivity gap, and that will have to be filled with maybe extra growth in coming periods.
And second question to the topic. The Austrian government prolonged short-term work regulations until the end of years for certain industries. Is -- will you still receive some short-term work benefits, I think, for Q2? Yes?
No, no, no. We stopped in -- on the 31st of March. And for the time being, I mean we are not planning to restart the program. What really the winter will bring, nobody knows right now and also energy shortages could bring because these are things that depend on international development. But excluding that, I would not foresee any application for reentering the program.
Any other questions in the room?
Yes. May I speak now? Vladimira Urbankova, Erste Bank. I would have 2 short questions. One would be related to personnel costs and inflation. So just if you can remind me, what is the expected salaries or wages increase for this year?
And next question, do you have some more [ jokers ] in terms of selling more land if we should expect something still happening?
Yes, starting with your last question, I mean not for the rest of this year and maybe also not for '23. But once the bureaucratic procedures are finalized, our development of the new area, which is westward of our airport and covers land between the airport and OMV Refinery and Borealis, will then be tendered. And that's a very significant land bank.
And given the shortage in land where you can build, for example, logistic facilities, we see a very, very high interest of international companies. And this will be the next step in the development of the airport city. And it includes, I would cautiously say, very significant markups to the value -- to the book value of that land. Your first question?
First question was related to inflationary pressures in terms of personnel costs. If you have any agreed increase in salaries.
Yes, we already concluded wage increase of 5.8%, if I remember correctly, from the 1st of January '23, which is covering inflation until end of the year '21. So covering the inflation of '22 and the first 3 months of '23 will be subject to the collective agreement negotiations and maybe in April and May '23. So we are not exactly final on what this will bring. But given the high inflation rates, I'm pretty sure that it will be a very feel-able figure that will be the result of that negotiations.
For '22, you should not expect any further increases because '22 was already settled. And for '22, we paid a corona premium to our employees, but the expenses of that have been already included in our balance sheet end of the year. So no additional effect in '22 from that front. But overall, as we see on the field of energy costs of material costs, we have to expect a very substantial increase for the next 2 years of wages and salaries parallel, more or less to inflation.
On the other hand, I want to remind you that, fortunately, the Austrian Parliament passed an amendment to the airport charges law that up to 26 airport charges will also be adapted on the basis of the inflation rate, which should shield us against a substantial mismatch between the development of our regulated income versus the development of our personnel costs. I mean this will not be totally offset or equalized, but it is a very substantial fielding against these effects of high inflation we see right now.
Okay. Thank you, Vladimira. Are there any questions left that have been unanswered? We'll take a look into the room. Andrew is not with us today, unfortunately. But I see Paul is here from Kempen. Do you have any questions? If not, that's also fine with us.
Yes, nothing on my end. Thank you.
Okay. Perfect. Okay. Then let's say a final call into the room. Are there any open questions? No? Okay. Perfect.
So thank you very much.
Have a nice day.
Thank you very much, and have a nice day and looking forward to joining us in the next call. Bye-bye, and cheers from Vienna.
Bye.