TAV Airports, a part of the leading airport management platform globally that served 218 million passengers in 2019, announced that it could only served 11.4 million passengers in the first half of 2020.
The consolidated revenue of the company during the same period was EUR 141.9 million.
TAV Airports Holding Executive Board Member & CEO Sani Sener stated “The second quarter of 2020 was marked all over the world by the Covid-19 pandemic related lock downs and travel restrictions. These travel restrictions affected the aviation sector very dramatically as international passenger traffic dropped to nearly zero all around the world. Due to these restrictions, there were unprecedented drops in the number of passengers we served in the second quarter of 2020. With the effect of the second quarter, the number of passengers we served unfortunately decreased 70% compared to last year during the first six months of 2020.
Our airports have now mostly reopened to international traffic. We expect Georgia, which is partially open now, to fully open in September. Medinah has opened to domestic traffic and the restart of international traffic is still to be announced.
What really matters for a rebound in international traffic are the bilateral agreements between countries to open their borders mutually. As the countries reopen their borders with each other, we have started to see some rebound in the number of passengers served. Two of our key markets which are UK and Russia have opened to regular commercial traffic with Turkey. Turkey has handled the Covıd-19 outbreak very well and is ready to welcome tourists from the EU as well. Reopening of the borders between EU and Turkey will speed up the recovery in international traffic.
We have responded to this global crisis very decisively with regards to our operational expenses and have reduced monthly operational expenses from €36m to €16m in the second quarter of 2020. With this reduction, we have achieved a savings of 32% in the first half. I would like to extend my gratitude especially to our employees and sub-contractors for making this possible. During times of crisis, the chief task for management is to take the necessary cost cutting actions fairly between stakeholders, shareholders, investors and employees. We have done our best with regards to this balance.
We have also made the necessary applications to the aviation authorities in each country that we operate for all our airports to be compensated for our losses of revenue based on the “pandemic” clauses of Force Majeure definitions in our contracts. Depending on the content of each contract, this compensation could be in the form of time extension, rent postponement or other methods to compensate our losses.
We are also about to complete the Almaty transaction which we had announced before the pandemic. We are planning to finalize the Almaty transaction in the third quarter of 2020. Almaty had significant cargo traffic during the second quarter and has proved to have defensive characteristics in earnings quality. As a perpetuity with no renewal risk, it will be a valuable addition to our portfolio. Almaty Airport is clearly destined to be a fast air cargo hub on the New Silk Road. We also expect the 6.5 million passengers currently served to increase significantly after our investments. We expect Almaty to have a positive effect on the valuation multiples of TAV Airports once the transaction closes and traffic normalizes back to 2019 levels.
TAV Airports entered this crisis with a strong balance sheet. Supported by the strength of our balance sheet, we are continuing to invest in the future of our business through the Almaty transaction. These are historic and unprecedented times and I believe with the cooperation of our stakeholders, employees and our investors we will emerge even stronger out of this turmoil. I would like to extend my deepest gratitude to all our employees, shareholders and business partners for their unwavering support during these difficult times.”
KEY PERFORMANCE INDICATORS
(in EURm) | 1H19 | 1H20 | Chg% |
Consolidated Revenue | 339.5 | 141.9 | -58% |
EBITDA | 116.6 | (9.6) | nm |
EBITDA margin (%) | 34.4% | nm | nm |
Net Profit From Continuing Operations | 14.8 | (146.9) | nm |
Net Profit from Discontinued Operations | 46.5 | (3.2) | nm |
Total Net Profit | 61.3 | (150.2) | nm |
Number of passengers (m) | 38.2 | 11.4 | -70% |
– International | 21.4 | 4.7 | -78% |
– Domestic | 16.8 | 6.8 | -60% |
(*) All commercial traffic of Istanbul Ataturk Airport was transferred to the New Istanbul Airport on April 6th, 2019. As per IFRS 5.13, Revenue and EBITDA reported after the closure have been restated to exclude the results of TAV Istanbul. TAV Total pax numbers reported after closure also do not include the results of Istanbul Ataturk Airport.
