TAV increased net profit by 64% with the right strategies
TAV increased its revenue by 9% to EUR 983 million in 2014. Consolidated net profit of TAV Airports increased 64% and reached EUR 218 million. The number of passengers at the airports operated by TAV reached to 95 million with an increase of 14% compared to the previous year. TAV Airports Holding President & CEO Şener highlighted the importance of growth strategies of service companies in financial performance.
TAV Airports Holding (ISE: TAVHL, “TAV”), the leading brand of Turkey in airport operations, announced a net profit of EUR 218 million in 2014 with an increase of 64% compared to the previous year and increased its revenue to EUR 983 million with an increase of 9%. The company will propose a dividend distribution of TL 306 million.
Şener: “The strategy of growth in service companies started bearing fruit.”
TAV Airports Holding President & CEO Sani Şener stated “TAV Airports also owes its strong financial results to the high operational performance of its service companies. 3 years ago, TAV Airports set a goal of expanding its service companies to the airports that TAV does not operate. Today, we have managed to take part in 39 other airports with our service companies besides the 14 airports we operate. In 2014, while our revenue increased 9% and reached EUR 983m, our net profit came in at EUR 218m, demonstrating 64% growth, fully in line with the guidance we had disclosed in the beginning of the year. During this time our passenger number reached 95m. Our company’s EBITDA reached EUR 434m. Furthermore, our contribution to employment continued and our headcount increased to 14,478 by an increase of 6% on average.”
Şener: “We are operational at 53 airports as our service companies grow outside of TAV”
Şenercontinued “As we expanded our airport portfolio in line with our corporate strategy, we launched a new growth initiative within TAV Airports: expansion of our service companies outside of the TAV ecosystem. While currently, we operate at 14 airports, our service companies provide services at 39 other airports. In total, we have a footprint at 53 airports around the world. We will continue pursuing this strategy to attain even better financial results. During the year, ATU, our duty free operator company, was awarded the concession to operate the duty free shops at Salallah Airport in Oman as well as at five other airports in Tunisia, including Carthage Airport in the country’s capital. In addition, ATU assumed operation of the duty free shops at Monastir Airport in Tunisia in July 2014. BTA, our food & beverage company, began operating the food and beverage outlets at Uniq Istanbul, which is likely to become one of Istanbul’s most popular shopping malls. TAV Operation Services commenced operation of Air France/KLM passenger lounges at Frankfurt, Munich and Stuttgart airports in Germany. TAV Information Technologies won the contract to set up the IT infrastructure for Abu Dhabi Airport. Expanding the geographic scope of its services to include Medinah, HAVAS posted a major jump in profitability as a result of the restructuring program implemented in 2014. In December 2014, TGS, a joint venture of HAVAS and Turkish Airlines, won a tender from Turkish Airlines to provide ground handling services for eight major Turkish airports.”
Şener: “We will submit a proposal to pay TRY 306 million in dividends.”
Highlighting the importance of the strategy implemented in 2014 performance, Şener continued: “The successful financial performance of TAV Airports achieved in 2014 also represented our operational success. As per our corporate strategy, while strengthening our existing airport portfolio, we also focused on growth of our service companies outside of TAV and we attained all our financial targets set at the beginning of the year. Henceforth, the Board of Directors has resolved to propose a total dividend payment of TRY306 million to the General Assembly. In 2014, we had distributed TRY199 million of cash dividend from our 2013 net profit.”
Şener: “We topped the Istanbul and overall passenger targets that we had set at the beginning of 2014”
Şener added: “We topped the Istanbul and overall passenger targets that we had set at the beginning of 2014. According to passenger traffic statistics for the year, Istanbul Ataturk Airport was the fourth busiest airport in Europe. In order to ensure uninterrupted passenger growth at Istanbul Ataturk, we began expanding this facility in cooperation with the State Airports Authority of Turkey (DHMİ). The investments DHMİ undertook in the apron area increased the airport’s aircraft parking capacity by 25% as of November 2014. A 42% total increase in parking capacity will result as these investments are finalized in 2015. Meanwhile, TAV Airports will initiate approximately €75 million investment to increase the capacity of the international terminal. The terminal extension projects will be completed in 2016”. Remarking that they continuously raised the bar higher in domestic operations, Şener underlined: “In March, we were awarded the tender for operation rights of Milas Bodrum Airport; and hence increased the number of airports we operate in to 14. We took over the operation of the domestic terminal of Milas Bodrum Airport in July 2014 and as a result, we served nearly 1 million additional passengers during the second half of the year. At the beginning of 2014 we completed construction of Izmir Adnan Menderes Airport’s domestic terminal, which commenced service as Turkey’s largest domestic airport terminal. This was also a stellar year for Gazipaşa Alanya Airport, where passenger traffic grew a dizzying 115% to 726 thousand passengers. After completion of the expansion projects that we will be undertaking here, Gazipaşa Alanya Airport’s capacity will climb to 2 million passengers per year.”
International operations continue to grow brilliantly
Highlighting that international operations of TAV also continue to grow; President & CEO Şener explained: “Medinah Airport in Saudi Arabia continued to perform brilliantly with 22% growth in passenger traffic in 2014. The new terminal building that will go into service in first quarter 2015 will remove all roadblocks to this airport’s future growth. As rapid expansion also continued at our airports in Georgia and Macedonia in 2014, we extended our airport portfolio to encompass Eastern Europe by taking a 15% equity stake in the consortium that operates Zagreb Airport in 2013. This year we expect to learn the result of the tender for the operation of New York LaGuardia Airport in the United States that we had bid on in 2014.”
TAV will continue to grow
Reminding that TAV Airports finished the year at the top in the Board of Directors category and in the third place in the overall Corporate Governance rating, Şener added “As a result of our sustainability and corporate governance initiatives, we were included in the BIST-Sustainability Index that is comprised of only 15 companies. We have always strived to be a model corporate citizen that benefits society as a whole while conducting its operations. Our contribution to the public coffers through tax and concession lease payments amounted to TL8 billion since 2005.” Underlining that TAV will continue to grow in the following periods, Şener stated “In the coming period, our growth will be built on three pillars: Organic growth at our existing airports, growth from new airport additions to our portfolio, and the growth prospects of our service companies outside of TAV Group. We will move forward in all three areas without compromising the high performance we have demonstrated to date. I would like to take this opportunity to thank our shareholders and business partners for placing their trust in us as well as our employees for their dedicated efforts and hard work.”