Market Data 
Investing.com — Flughafen Zurich (SIX:) shares fell on Tuesday post its 1H24 results, which fell short of expectations.
At 5:08 am (0908 GMT), Flughafen Zurich was trading 3.9% lower at CHF 196.30.
The company reported an EBITDA of CHF 347 million for the first half of 2024, which was 3% below the consensus estimate of CHF 358 million and UBS’s forecast of CHF 351 million.
This performance translates to a 55% EBITDA margin, slightly better than in the previous year but still below market expectations.
The lower-than-expected EBITDA was primarily driven by higher operational expenses. Opex excluding concession accounting was CHF 273 million, exceeding consensus expectations of CHF 260 million and UBS’s estimate of CHF 267 million.
The increase in operational costs, including a 13.5% rise in personnel expenses, impacted overall profitability. Both UBS and Stifel noted that the higher-than-expected costs could lead to negative revisions in full-year EBITDA forecasts.
Free cash flow (FCF) was slightly negative at CHF -2 million, influenced by a CHF 60 million upfront payment for a new airport concession.
Adjusted FCF came in at CHF 58 million, reflecting a significant year-on-year decline largely due to peak capex for the Noida airport project in India. Total capex for H1 stood at CHF 275 million.
A positive from the results was the upgraded traffic guidance. Flughafen Zürich now expects passenger traffic to reach approximately 100% of 2019 levels, up from the previous estimate of 95%.
This adjustment reflects a 7.5% year-on-year increase, which aligns with UBS’s forecast but is slightly below Stifel’s estimate of 8%.
The upgrade comes in response to strong traffic growth observed in the first seven months of 2024, which was 11% higher year-on-year.
However, the company’s EBITDA guidance remains vague, with the only indication being that it will be “higher” than last year.
This is less specific than consensus expectations for a 10% year-on-year increase and UBS’s forecast of a 15% increase.
Flughafen Zürich reduced its capex guidance for FY-24 to CHF 600-650 million from the previous range of CHF 650-700 million. This capex includes CHF 250-300 million for Zurich and CHF 350 million for international projects, primarily the Noida airport.
Despite this reduction, net debt/EBITDA increased to 1.9x from 1.6x at the end of FY-23, reflecting the higher capital expenditures.
Stifel’s target price for Flughafen Zürich is CHF 265.00, implying a potential upside of 29.8% from the closing price of CHF 204.20.
UBS also anticipates that the higher operational costs could lead to negative revisions in full-year EBITDA forecasts, projecting a slight downward adjustment.
