Zurich Airport hits record half-year profit on passenger surge

Investing.com -- Zurich Airport Group (SIX:FHZN) on Tuesday reported the best half-year result in its history, with revenue, EBITDA, and consolidated profit all improving in the first six months compared with the prior-year period. Consolidated profit rose 6% to CHF 161.3 million from CHF 151.8 million.

Revenue from flight operation charges rose CHF 11.7 million, or 4%, to CHF 281.0 million in the first half of the year. Aviation fees and other aviation revenue increased to CHF 46.2 million, up CHF 2 million.

Total aviation revenue grew from CHF 313.5 million to CHF 327.3 million, a 4% increase, driven partly by stronger growth in local passenger numbers, who pay higher fees than transfer passengers.

Commercial and parking revenue fell 1% to CHF 132.2 million due to reduced retail space in the landside area during construction.

Real estate revenue held nearly unchanged at CHF 98.4 million, with rising rental and leasing income offset by lower energy and utility cost allocations.

Revenue from services was CHF 25.2 million, similar to the prior-year period. Revenue from the international airport business declined from CHF 60.6 million to CHF 57.6 million, mainly from lower construction project revenue.

Excluding this income statement-neutral item, international business revenue rose 14% or CHF 7.1 million.

Total non-aviation revenue decreased 1% to CHF 313.4 million. Adjusted for construction project revenue, non-aviation revenue grew by CHF 5.9 million, or 2%.

Operating expenses fell 1% to CHF 281.8 million. Adjusted operating expenses, excluding construction projects, rose 3% compared with the first half of 2024.

Personnel expenses increased 11% to CHF 131.6 million, reflecting inflation, volume-related adjustments, and the takeover of services for passengers with reduced mobility from January 1, 2025.

Other operating expenses decreased to offset that increase. Police and security costs grew 3% to CHF 65.6 million, while energy and waste costs declined 13% to CHF 18.5 million on lower electricity sourcing costs.

EBITDA rose CHF 12 million to CHF 358.8 million, an increase of 3%, with an EBITDA margin of 56%. Depreciation and amortisation rose 4% to CHF 149.7 million.

The finance result improved by CHF 1.5 million to negative CHF 7.1 million due to higher interest income.

Operating cash flow was CHF 305.8 million. With investments in property, plant and equipment, projects in progress and airport operator projects totaling CHF 422.9 million, free cash flow for the first half of the year was negative at CHF 117.1 million, compared with negative CHF 1.5 million a year earlier.

For 2025, Zurich Airport Group expects passenger volume at about 32 million, an increase of 2.5%. Aviation revenue is projected to move in line with traffic growth.

Non-aviation revenue is expected to be slightly higher overall, with parking benefiting from higher traffic, while commercial revenue is expected to decline due to temporary retail closures from construction.

Real estate rental and leasing revenue is forecast to rise slightly, with lower energy and utility cost allocations reducing revenue. International business revenue is expected to increase.

Operating costs are expected to rise from inflation-related adjustments, volume growth and employer-related measures.

Personnel expenses will rise more than average due to the mobility services takeover, offset by lower other operating expenses.

EBITDA is expected to be slightly above the 2024 level, with consolidated profit similar to the previous year.

Investments are expected at about CHF 500 million at the Zurich site, including the Radisson Blu acquisition, and CHF 250 million at subsidiaries abroad, mainly for the completion of construction of Noida Airport.