Annual Report for 2019

Company Announcement
Copenhagen, 3 March 2020

A drop in revenue and lower dividend

It was a busy year for Copenhagen Airport in 2019 as passenger numbers on the 188 direct routes reached close to 30.3 million. That meant 82,895 travellers passing through the terminals on an average day on their way to or home from a vacation or a business trip.

CPH’s overall revenue fell by 2.2% to DKK 4,345.7 million (2018: DKK 4,444.8 million), which was in line with the guidance provided in the Q3 2019 report.

The aeronautical business was marked by lower charges paid by airlines for using the airport. Charges were lowered 10% in 2018 and by another 5% in 2019. In addition, traffic at the airport was affected by a number of bankruptcies, a seven-day strike by SAS pilots and by Norwegian’s new strategy of focusing on profitability rather than growth. Aeronautical revenue was down by 6.2% to DKK 2.4 billion.

The non-aeronautical business is based on, among other things, rental income, concession revenue from parking and the shopping centre. Overall, the non-aeronautical revenue for the year was up by 3.2% to DKK 1,930.5 million.

Profit before tax for 2019 fell by 8.7% to almost DKK 1.3 billion. Profit before tax excluding one-off items was DKK 1,310.4, in line with the guidance provided in the Q3 2019 report.

Historically, CPH have met the shareholders' expectations of dividend payments, including that of the Danish state, and has annually distributed 100% of the net profit; but in light of the situation with the global economic uncertainty, lower charges and a very high level of investments, the Board of Directors have decided to recommend to the Annual General Meeting that no dividend will be paid for the second half of 2019. For the first half of 2019, dividends of 50% of the half-year result were paid. Thus, for the full financial year 2019, a total dividend of 23.3% is paid. The dividend policy to pay out 100% of the company's result over time is maintained.

Business under pressure
CPH reached a milestone on 4 June 2019 when H.R.H. Crown Prince Frederik inaugurated Pier E, a DKK 2 billion project for a new terminal building that provides more space for travellers and large modern aircraft on long-haul routes out of Europe. However, the business of Copenhagen Airport A/S is under growing pressure, and about DKK 2 billion has been invested annually in recent years to develop the airport. These are record investments that are much higher than CPH’s current profit before tax. That is not a sustainable situation in the long term. The CPH cash flows have come even more under pressure due to global economic uncertainty, Brexit, trade wars and the corona virus. CPH aim to continue investing in the Airport of the Future and to improve Denmark’s international connectivity through direct routes to all parts of the world. The plan is to develop the airport as passenger numbers increase. However, in light of the growing global economic uncertainty, all of the planned investments may not be possible given the cash flows available. As a result, CPH will assess and amend the level of investments according to the general economic development and risk situation. If CPH are to succeed, we will need as stable a framework and as predictable a financial platform as possible. Climatic and financial sustainability is essential for the airport.