The Switzerland-based handling agent reports an increase in revenues of 6.1 percent to €1,526 million in the first half year 2019, versus 1,438 million for 1H, 2018. Simultaneously, the operating EBITDA went up 7.2 percent, reaching €122 million in the first six months of the year.
As it seems, the current crisis in air freight and aviation in general, is passing by Swissport. This is evidenced more-or-less by the handler’s half year results.
According to a company announcement, the operating cash-flow for the first half of 2019 climbed to 78.1 million euros, up almost four-fold compared to the same period last year (20.2 million euros). In accordance with the International Financial Reporting Standards (IFRS 16), which came into effect in January 2019, operating EBITDA in the first half of 2019 was 191.4 million euros and operating cash-flow 148.1 million euros.
Eric Born, President and CEO of Swissport International AG spoke tentatively of “solid half-year results, driven by profitable revenue growth and our continued efforts to further improve our cost efficiency.” He went on to say: “As the global aviation market now shows visible signs of a slowdown, we are implementing additional measures to safeguard earnings and to improve the Group’s profitability in the medium term.”
The second quarter results, ending 30 June, were encouraging as well. Revenue increased to 776.5 million euros compared to 753.6 million euros in Q2 2018, up 3 percent. Operating EBITDA (IFRS 16 adjusted) for the period remained roughly stable at 76.1 million euros compared to 76.4 million for the second quarter 2018.
Tonnage went south – although not dramatically
At 115 cargo warehouses worldwide Swissport handled 2.23 million tons of air freight in the first half of 2019 compared to 2.35 million tons in the first half of 2018. The sale of the cargo handling business in France to France Cargo Handling (FCH), which was successfully completed in June 2018, accounts for 2.1% of the overall 5.4% volume decline. The remaining 3.3% volume reduction is roughly in line with the 3.6% contraction of the global air cargo market. According to IATA, June 2019 marked the eighth consecutive month with declining year-on-year air cargo volumes.
… so were passenger figures
Turning to the passenger business, the Zurich-based company handled 1.02 million passenger flights globally (down 1.3%). Changes in Swissport’s client portfolio at London Stansted Airport and at Bristol Airport in the UK, and the strategic decision to discontinue the ground service business at Los Angeles International Airport in the U.S., were the main reasons for the 3.2% decline in passenger volumes compared to the 132 million served in the same period last year. The adjustment at Los Angeles, taken in the second half of 2018, has been delivering the expected economic benefits to Swissport's U.S. business.
Improved cash position
As earlier announced, in August Swissport has successfully refinanced existing corporate debt, well ahead of the 2021/2022 maturities. The new senior notes and senior secured notes with maturities in 2024 and 2025, respectively, and a new term loan B, have a total volume of EUR 1,510 million.
Swissport used the net proceeds from the offering of the notes and the term loan B facility primarily to repay its outstanding borrowings, which consisted of existing outstanding term loan B facilities and an existing outstanding revolving credit facility, and to fully redeem the aggregate principal amount of its existing outstanding senior secured and senior notes.
The refinancing at more favorable terms also significantly increased Swissport’s cash position. This provides additional stability and strategic flexibility and enables the company to further expand its leading global market position through organic growth, direct market entries or selective bolt-on acquisitions, reads their release.