In recent months, international air traffic has recovered strongly. In the regions around major airports in particular, a look at the sky is enough to get this impression - there are clearly more jets and their vapor trails in the sky. This new desire to travel can also be seen in the traffic figures of the major airports. Take Zurich, for example: In June, the airport with the international abbreviation "ZRH" handled around 2.1 million passengers. This was 248% more than in the same month last year. However, passenger traffic was still a quarter below the level of June 2019. Frankfurt Airport is separated by a similarly large gap from the pre-Corona period. Nevertheless, the hustle and bustle is also increasing enormously at Germany's largest airport. With almost 5 million passengers, "FRA" handled 181% more guests in June than in the same month last year (see chart). The international business of the Fraport operating group is also recovering strongly. At Greek regional airports, passenger traffic in June even exceeded 2019 levels for the first time.
On the stock market, Fraport is nevertheless in a downward spiral. Since the turn of the year, the airport operator's share price has fallen by more than a quarter (see chart). On the one hand, the war in Ukraine has slowed down the mid cap. In addition to this conflict, a notorious shortage of personnel is causing major problems for the aviation sector and a stomachache for many passengers. Fraport had cut around 4,000 jobs during the pandemic. The 1,000 new jobs that have since been created in ground services are not enough to resolve the chaos in the form of delays and flight cancellations. "The problem will not get smaller in the future, even though we are hiring," CEO Stefan Schulte said in early July. At the same time, he made no secret of the fact that the strength of travel demand has exceeded even the group's optimistic expectations. "That's where I openly admit that we were wrong," the top manager said. To make matters worse, the Verdi union called on Lufthansa ground staff to strike this week Wednesday. As the largest location of the crane line, FRA would also be affected should the strike actually take place.
Despite all the turmoil, the CEO has not touched the forecast to date. The fact that Stefan Schulte has drawn up a cautious and broadly based outlook is likely to pay off here. For 2022, he expects consolidated sales of around EUR 3 billion, compared with EUR 2.14 billion in the previous period. Operating profit (Ebidta level) is expected to reach a range between around EUR 760 million and EUR 880 million. By comparison, the Group earned EUR 757 million here in 2021. At the bottom line, Fraport is targeting a profit of at least EUR 50 million and up to EUR 150 million. After deep red figures in the first Corona year, the Group achieved a turnaround in 2021 with just under EUR 92 million. According to Kepler Cheuvreux, the forecast is conservative. Due to the unexpectedly strong recovery in passenger numbers, the research house even considers an increase in guidance possible. The time could come as early as August 9, when Fraport publishes its half-year figures.
Shortly before the payment date, Leonteq launched several softcallable barrier reverse convertibles (BRC) on the airport share. As a single underlying, Fraport yields a coupon payment of 10.00% p.a. in the product currency CHF. In the EUR variant, the guaranteed quarterly payout is 10.60% p.a.. For both products, the underlying enters the term of 15 months with a barrier of 59% of the initial level. As long as Fraport does not use up the cushion, the issuer will repay the nominal value in full at the maturity date. The barrier for a new BRC on Fraport and Zurich Airport is also 59%. The multi-product pays a guaranteed coupon of 11.60% p.a.. Here, it is important for both shares not to fall to or below the barrier. Otherwise, the investment would be linked to the performance of the weakest stock at maturity. Each of the three new BRCs carries the soft callable feature, which allows early termination and redemption.
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