Since our establishment in 1997, we have been supported by two pillars of growth at TAV Airports. These have been the organic growth of our existing airports portfolio and the enlargement of this portfolio by addition of new airport operation assets. In this regard, 2014 was a strategically significant year because we added another key growth pillar to our existing strategy. We defined ‘inorganic growth of service companies’ as the third axis of growth in 2014 and deployed our service companies’ management teams to uncover value accretive potential opportunities across the world.
Since the definition of our third growth pillar we have achieved significant results across all our service platforms. Our duty free company, ATU, took over the duty free operations of Salalah Airport in Oman, Houston Airport in USA, Carthage and four other airports in Tunisia and the duty paid operations in Izmir and Bodrum Airports’ domestic terminals. BTA, our catering company has established a food logistics company and won the tender to operate the food and beverage areas in Muscat Airport, Omman and started operating the food court in Istanbul, at Maslak’s new shopping mall, Uniq. Havas Saudi started ground handling operations in Medinah. Operation Services started operating passenger lounges in Germany and Kenya for various airlines and in Turkey for Turkish Railways. TAV IT started providing IT solutions to Abu Dhabi Airport and TAV Academy became an ICAO certified training center, providing aviation know how to students across the world.
As a public-private-partnership, TAV Airports and the State Airports Authority (DHMI) each has its own respective area of responsibility in the management of Istanbul Ataturk Airport. While the terminal areas are within our jurisdiction, the runways and taxiways are the responsibility of DHMI. During the year, DHMI has finished a large scale investment project to increase the aircraft parking capacity of the airport. This capacity was presenting itself as a bottleneck to the future growth potential of Ataturk Airport as aircraft needed to wait in the air until a parking space could be found for them for after landing. This problem has been solved in two phases. In the initial phase, DHMI added 26 more parking spaces to the airport by end of 2014. By end of 2015, 17 new positions have been added, boosting the total parking capacity by 42% to 145.
In 2015, we started contributing to the capacity increase project by streamlining the traffic flow in the main international terminal and undertaking construction of an extension. We started by demolishing the old cargo terminal, and the construction of the new terminal extension in the place vacated by the cargo terminal is nearing an end as we speak. With this extension, we will add eight more bridges and 13 more busgates. Also additional duty free and catering areas and an increase in the carpark capacity of the airport will be available. The combined effect of the investments made in Ataturk Airport will be the addition of capacity for around 10 million more passengers per year.
We have also opened the mezzanine floor of Istanbul Ataturk Airport International Terminal to commercial use adding extra catering areas. This space will support the already crowded catering areas by offering a more upscale dining experience and boost BTA’s profitability. New duty free areas are also available through this renovation which should help duty free revenue.
In the second quarter of 2015, the Medinah Airport renovation project was completed and after trial runs, the opening ceremony was honored by his excellency King Salman of the Kingdom of Saudi Arabia. It was a pleasant surprise for us to celebrate both Ramadan and the opening of the new terminal together. We are very proud to serve the second holy city of Islam with an airport that’s truly at global standards.
It has been 15 years since we started operations at Istanbul Ataturk Airport and during this time we have added 13 more airports to our portfolio, which goes to show the dynamism of TAV Airports. The tradition of expanding our portfolio through the addition of new and profitable airport operations continues with Milas Bodrum Airport. In July 2014, we took over the operations of the domestic terminal in Milas Bodrum Airport. In October 2015, we took over the international terminal, as well. We are going to serve our country and our shareholders by developing Milas Bodrum Airport to its maximum potential in the years to come.
As Gazipasa Alanya airport continues its dazzling growth, during the year we undertook the necessary investments to increase the capacity of Gazipasa Alanya Airport.
As part of these investments, we extended the runway such that the present runway now crosses over a running motorway, the only one of its kind in Turkey. We have also received prequalification for the tender for five regional airports in Philippines. We are hoping to receive the results of this tender process in 2016.
We finished 2015 with 8% passenger growth, 10% revenue growth and 13% EBITDA growth. Net profit growth came in slightly below guidance, due to FX movements and the one off income we had recorded in the last quarter of 2014. Thus, we have attained most of the guidance set at the beginning of the year for the third year in a row. We had distributed a total of TRY 306 million in dividends as cash in 2015 in line with our 50% payout policy. For 2016, the Board of Directors has resolved to submit for shareholder approval, a dividend of TRY 348 million out of 2015 earnings at the General Assembly meeting, which corresponds to a payout of 50%. In the future, we are going to keep our track record of ‘smart growth’ strategy and continue to balance growth with dividends.
I believe what’s equally important is what we contribute to our country, employees and clients as a company. This year we paid around EUR 500 million to the state in the form of rent, taxes and social security. We paid EUR 200 million to our employees as wages. We invested EUR 88 million to increase passenger comfort and created employment opportunities for our youth. An enterprise must prioritize the benefits of the country, pay its employees fairly, contribute to their development through education and training and invest in the future to be considered truly successful. TAV’s main goal is to go after this kind of success. Thus, this year, as in previous years we have crowned our financial success with the social benefits we have created.
In 2016, we expect to see a 7 to 9% increase in revenue, 7 to 9% increase in EBITDAR and 10 to 12% net profit increase, under normal conditions.
The main risks to our guidance are: geopolitical risks, other unexpected events that may disrupt passenger traffic, exchange rate fluctutations and an adverse outcome from the trilateral negotiations in Tunisia.
The future holds many opportunities for us in all our three pillars of growth. I would like to thank all our shareholders, business partners and employees for their trust in, and dedicated efforts for the TAV Airports brand.
Dr. M. Sani Şener
Member of Board of Directors and
President & CEO