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Half-yearly business report

The Supervisory Board of Aerodrom Ljubljana, d.d. discussed the company’s report on its performance in the first half of 2012. Despite a decrease in traffic and the resulting decline in revenues, the company ended the first half of the year in line with plans and without cash-flow or liquidity problems, primarily by adjusting expenses. Net profit totalled EUR 1,980 thousand during the first half of 2012, and exceeded planned net profit by 8%.

The company generated operating revenues of EUR 14,564 thousand during the first half of the year (equivalent to 45.1% of the forecast in the annual plan), which is 3.1% lower than planned and down 5.8% on the same period last year. The company responded to the fall in operating revenues by adjusting operating expenses, which totalled EUR 12,713 thousand during the first half of the year, down 4.8% on the first half of last year and 5% lower than planned. All key categories of operating expenses were down on the planned amounts for the first half of the year.
The company generated an operating profit (EBIT) of EUR 1,852 thousand from operating revenues and expenses, which is 12.3% higher than planned for the period, but down 12.1% on the operating profit generated in the same period last year. The company ended the first half of the year with a net profit of EUR 1,980 thousand (equivalent to 33.7% of the annual plan, the low realisation of the annual plan being due to the seasonal component of the company's activity, with higher traffic and revenues during the summer months, while the seasonal component is not reflected on the cost side). Net profit was 8% higher than planned, despite the drop in traffic.

In general, the economic and political situation in Slovenia and Europe overall is reflected in a decline in business and tourist travel. Despite the fact that Aerodrom Ljubljana is attempting to attract new carriers by adapting its pricing policy and increasing activities aimed at attracting new markets, carriers are cautious in establishing new connections with Slovenia due to the high risk of low aircraft capacity rates. Moreover, it is not merely the prices and quality of the company's services that are important to carriers; investments in promotional activities on foreign markets are also necessary to ensure recognition and thus interest in travel to Slovenia. Aerodrom Ljubljana cannot, nor is it obliged, to provide these funds by itself, while the tourism industry and government institutions do not have the funds or the capacity to make such investments.

In the traffic category, where the company discloses data regarding the volume of traffic served, the data are worse than planned because carriers did not fully meet their forecasts, which were the basis for the business plan: the domestic airline carried fewer passengers than planned, while the planned increase in traffic (e.g. a larger number of frequencies and the replacement of smaller aircraft with larger aircraft) on the foreign market was not fully realised. In addition, the scheduled flight to Prague was unexpectedly cancelled in June. The airport served 537,476 passengers during the first half of this year (equivalent to 40.7% of the forecast in the annual plan), which is 7.3% lower than the planned amount for the period and down 11.5% on the same period last year. A smaller drop was recorded in aircraft movements, which totalled 18,070 during the first half of the year (equivalent to 47.3% of the forecast in the annual plan), down 4.3% on the planned amount for the period and down 8.6% on the same period last year. In the cargo traffic segment, the drop in the volume of cargo handled during the first half of the year (8,151 tonnes) was the result of the continuing deterioration in the economic situation. Actual results were 7.4% lower than planned for the period due to the drop in the road cargo segment, while air cargo and mail expressed in tonnage were more or less at the planned level.

Despite the fact that Aerodrom Ljubljana is attempting to increase air traffic through attractive offers of its services and by encouraging numerous carriers to establish flights to the Ljubljana airport, the effects of such efforts are limited. A new low-cost airline, which plans to establish scheduled flights from the airport to London Luton and Charleroi, is expected to enter the market this year. However, due to the economic crisis, in particular the lack of the systematic provision of promotional funds to increase Slovenia's recognition abroad, the company's activities are not expected to produce better results this year. As a result, the company will not achieve the planned figures regarding the volume of traffic or revenues. It will, however, adapt to the greatest extent possible by controlling operating expenses with the aim of minimising the degree to which actual profit lags behind planned profit. 
 


Brnik, 23 August 2012