Interim report of Copenhagen Airports A/S (CPH) for the period 1 January – 31 March 2021
Stock Exchange Announcement
Copenhagen, 18 May 2021
The Board of Directors has today approved the interim report for the period 1 January – 31 March 2021.
SUMMARY OF THE FIRST THREE MONTHS OF 2021
Only 430,000 passengers passed through Copenhagen Airport in the first three months of the year. This is equivalent to the number of passengers in just six ordinary days before the COVID-19 crisis. With air traffic remaining at an extremely low level, CPH reported a loss of DKK 436 million before tax in the first quarter. At DKK 189 million, revenue was down by 75.2% relative to the first quarter of 2020, in which January and February were normal months. Having executed a significant cost-cutting programme, CPH’s focus is now on the restart and the government’s reopening plan for the travel industry.
CPH is thus still in the midst of the worst crisis in recent history. Operating at less than 10% of normal capacity, CPH is still relying on borrowed funds to keep the airport running from month to month. The necessary costs of maintaining operations far exceed CPH’s income. In the first quarter of the year, CPH had to draw down a further DKK 500 million on its credit facilities. This was necessary because CPH’s principal responsibility is to keep Denmark’s gateway to the world open even in times of very limited passenger traffic and, not least, for air cargo traffic.
Cash funds available – investments on hold
CPH is in the process of negotiating an extension of the DKK 6 billion credit facilities agreement entered into in May 2020 as well as an extension of the current loan covenant waiver agreement with existing lenders. The credit facilities agreement saw CPH through 2020, as CPH had to draw just under DKK 1.4 billion on our facilities. It is expected that a waiver extension of up to 18 months will be agreed on satisfactory terms.
CPH has executed a significant cost-cutting programme for its operating costs, including job sharing and redundancies. As announced in the 2020 Annual Report, this has resulted in an annual saving of approximately DKK 500 million. Before the COVID-19 crisis struck, CPH invested some DKK 2 billion annually in developing the airport. As part of last year’s extensive measures to cut CPH’s cash outflows, the investment programme was reassessed and reduced by DKK 800 million in 2020. Many investments were put on hold. These adjustments continue in 2021, and investments previously planned for the period 2020-2022 will be reduced by a total of more than DKK 2 billion.
The road to a healthy business
The aviation industry is still on its knees, and as many as 10,000 jobs have been lost in and around Copenhagen Airport. The airlines’ programmes offer many options for travelling this summer, but everything depends on the vaccines, the future EU COVID status certificate, infection trends, airport restrictions and the new reopening plan for the entire industry.
It is crucial that traffic and passengers begin to return soon if CPH is to stay competitive, remain able to invest in the airport’s green transition, facilitate access to Denmark, and also remain an attractive investment for its owners. It is not possible for CPH to save its way out of the crisis; the traffic needs to get moving again.
Battle for the hub
CPH’s ambition to be Northern Europe’s leading international aviation hub remains intact. However, competition for that position has intensified significantly during the COVID-19 crisis. CPH’s closest competitors, for example in Scandinavia and Germany, have received large sums in government support for development. That is not possible for CPH. CPH is very appreciative of the government support packages received, e.g. salary compensation. However, in comparison with our neighbouring countries, the Danish support packages are relatively limited, so CPH has had to draw on its own credit facilities.
In 2020, CPH received a total of DKK 348 million in government compensation packages. Despite this, CPH reported a loss before tax for the year of DKK 828 million.
SAS is by far the largest airline at Copenhagen Airport, accounting for about a third of the traffic. SAS has indicated that the company intends to consolidate its business at CPH. This is a key prerequisite for CPH to once again be able to offer a large international route network from Copenhagen.
HIGHLIGHTS
- The number of passengers at Copenhagen Airport was 0.4 million in the first quarter of 2021, a 91.0% drop from the same period last year due to the effect of the COVID-19 pandemic. The number of locally departing passengers was 0.2 million (89.9% fewer than last year), while transfer and transit passengers numbered 28 thousand (94.1% fewer than last year).
- Revenue amounted to DKK 189.3 million (2020: DKK 764.3 million), a 75.2% decline from last year.
- EBITDA was similarly affected and amounted to a loss of DKK 152.9 million (2020: profit of DKK 313.0 million), down DKK 465.9 million from last year.
- EBIT was a loss of DKK 405.0 million (2020: profit of DKK 103.6 million), corresponding to a decrease of DKK 508.6 million.
- Net financing costs amounted to DKK 30.5 million, which was in line with the same period in 2020.
- Profit before tax fell by DKK 507.7 million to a loss of DKK 435.5 million (2020: profit of DKK 72.2 million).
- Capital investments were DKK 138.2 million in the first quarter of 2021 (2020: DKK 489.1 million). Investments included the expansion of Terminal 3, construction of a multi-storey car park, new baggage facilities, various IT systems, as well as miscellaneous improvement and maintenance work.
OUTLOOK FOR 2021
Global aviation continues to face significant uncertainty from the ongoing COVID-19 pandemic as well as other factors such as economic uncertainty and climate change.
The pandemic will continue to affect the number of flights and passengers in 2021, in terms of both leisure and business travel. Airlines have announced that they will continue to operate with reduced capacity and will scale their business based on demand.
Due to the structural unpredictability that COVID-19 has created for air travel in Denmark and worldwide, and the significant uncertainty about how long the situation will last, it is currently not possible to make a reasonable assessment of the financial outlook for CPH. There is still significant uncertainty as to how and when travel restrictions will be lifted, and it is therefore not possible to provide an outlook for passenger numbers, revenue, pre-tax result and total investments.
As a consequence, CPH will continuously assess and adjust the level of operating costs and investments, and will advise the market as and when a meaningful outlook can be provided.
P.O. Box 74
Lufthavnsboulevarden 6
2770 Kastrup, Denmark
Contact:
Rasmus Lund
CFO
Tel.: +45 3231 3231
E-mail: cphweb@cph.dk
www.cph.dk
CVR no. 14 70 72 04
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