Travel demand helps Fraport's Q1 sales but war hurts profits

·1-min read
Outbreak of the coronavirus disease (COVID-19) in Frankfurt

FRANKFURT (Reuters) - Germany airport operator Fraport reported better-than-expected sales on Tuesday as travel demand boomed in the first quarter, but it posted lower-than-expected profits after a writedown related to its St. Petersburg subsidiary.

Fraport said its earnings before interests, taxes, depreciation and amortisation (EBITDA) rose 75% to 70.7 million euros ($74.77 million), below the 85 million euros expected by analysts in a Refinitiv poll.

This was because it had to write down 48.2 million euros on a loan connected with its minority-owned St. Petersburg subsidiary due to increased default risk amid the war in Ukraine, Fraport said.

The company added it was also impacted by the effects of rising prices as well as the latest COVID-19 wave in China and reduced airspace capacity because of the war in Ukraine.

At the same time, Fraport's revenue rose 40% to 539.6 million euros, above analysts' average forecast for 515.8 million euros, as passenger figures soared at airports across the group amid the lifting of pandemic-related restrictions.

"Despite the Omicron virus variant and new geopolitical uncertainties, a significantly higher number of people are travelling by air again," Chief Executive Stefan Schulte said in a statement, adding Fraport was sticking with 2022 targets.

($1 = 0.9456 euros)

(Reporting by Zuzanna Szymanska; Editing by Maria Sheahan)