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Key Czech Aeroholding Companies Generated Operating Profit of CZK 1.872 Billion in the First Half of 2015

During the first half of 2015, key Czech Aeroholding Group* (“the Group”) companies generated consolidated earnings (EBITDA**) of CZK 1.872 billion. The six-month Group results were positively influenced primarily by, alongside operating cost savings, increased revenue from aircraft maintenance and from aviation business thanks to changes to the incentive scheme for air carriers. Václav Havel Airport Prague increased the number of handled passengers by 5.4% year-on-year to 5.2 million. The Group has also increased the estimated yearly growth of earnings to 4%.

“I consider the first half of the year a success for the entire Group. We were able to react to the positive market development in terms of revenue, actively performed a number of changes to business strategies of the individual daughter companies and to cost management strategies within the Group at the beginning of the year and are now enjoying the positive results. This means that our operating results fully compensated, respectively exceeded, the expected drop in performance of Czech Airlines,” Václav Řehoř, Chairman of the Czech Aeroholding Board of Directors commented on the results.

Based on its operating results of the first half of the year, which were positively influenced primarily by, alongside continued savings of operating costs, increased revenue from aircraft maintenance and aviation business. The Group now estimates the 2015 EBITDA results to be higher than in 2014 by CZK 151 million, representing a 4% year-on-year growth. The new estimate completely compensates for, respectively exceeds, the planned EBITDA drop by about CZK 200 million due to Czech Airlines drop in performance results. Thanks to these two factors combined, the Group expects the 2015 operating profit to exceed the plan by CZK 351 million.

Václav Havel Airport Prague handled a total of 5.2 million passengers during the first half of 2015, representing a 5.4% increase when compared with the same period of the previous year. The aircraft load factor also increased - from 70.9% to 74.6%. Prague Airport continued to change its services in line with its new business and communication concept: ‘Enhancing Your Airport Experience’, with the goal of making the airport more attractive primarily for Czech passengers by expanding the services offered and lowering prices. Six new restaurants and fast food stands have launched their operation since the beginning of the 2015 summer schedule, while the existing restaurants have lowered their prices and expanded their offers. Revenue growth was also fuelled by the decrease in prices and introduction of a more user-friendly concept of safe parking, called ‘AEROPARKING,’ this June. During the first month of operation of the new concept, the revenue from online bookings of parking at Václav Havel Airport Prague grew by 80%.

The Group’s half-year economic performance was also influenced by a successful change in strategy of Czech Airlines Technics (CSAT) resulting in the exceeding of the planned revenue from aircraft maintenance by CZK 192 million. CSAT managed to enter into long-term agreements with key customers with guaranteed maintenance work volume. As a result, CSAT has increased its repair capacity of base maintenance and is in the process of hiring 100 new employees.     

Thanks primarily to the continued organizational structure optimisation and economic measures applied in the area of IT maintenance, the Group was able to achieve overall cost savings during the first half of 2015 which exceeded the planned volume by CZK 63 million.

 * Czech Aeroholding, Joint Stock Company, Prague Airport, Joint Stock Company, Czech Airlines Handling and Czech Airlines Technics

** EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization