RNS Number:0523I
N.V. Luchthaven Schiphol
24 August 2006
Schiphol Group - Net result for first half up 8.4% at EUR 88.0 million
Press Release
Schiphol, 24 August 2006
* Schiphol Group's net result, including capital gains on property, for
the first half of 2006 was up by 8.4% compared with the corresponding period
in 2005, from EUR 81.2 million to EUR 88.0 million.
* Excluding capital gains on property, the net result, of EUR 76.6 million, was
almost unchanged (1st half 2005: EUR 76.8 million).
* The operating result, including capital gains on property, increased by
10.4%, from EUR 126.3 million to EUR 139.4 million.
* EBITDA, including capital gains on property, increased by 5.6%, from EUR
209.7 million to EUR 221.4 million.
* Earnings per share increased rose by 8.4% from EUR 474 to EUR 514
Summary of main business results
* The number of passengers using Amsterdam Airport Schiphol, Rotterdam
Airport and Eindhoven Airport rose by 4.4% to almost 22.6 million, of whom
more than 21.5 million travelled through Amsterdam Airport Schiphol (4.3%).
* The costs of the government-imposed security measures at Amsterdam Airport
Schiphol rose by EUR 15.6 million (19.0%) to EUR 97.8 million. The revenue
from the Security Service Charge in the first half of 2006 was EUR 3.9
million less.
* The Consumers business area saw concession income from the See Buy Fly shops
at Amsterdam Airport Schiphol increase from EUR 3.58 to EUR 3.81 per
departing passenger on international flights.
* There was a sharp increase in the capital gains on the investment property
portfolio of the Real Estate business area, from EUR 5.5 million in the
first half of 2005 to EUR 16.1 million in 2006.
* The international activities of the Alliances & Participations business area
contributed EUR 6.9 million to the result before tax for Schiphol
Group in the form of interest income and dividends (1st half 2005: EUR 3.6
million).
Gerlach Cerfontaine, President & CEO of Schiphol Group, commented:
'We are pleased with the financial results achieved in the first half of 2006.
We are maintaining our forecast net result for the full year. Our forecast takes
into account the measures taken as a result of the attacks recently foiled in
the United Kingdom. Excluding capital gains on property and proceeds from the
sale of real estate and excluding the expected positive net effects of the
finalisation of the Schiphol Group opening balance sheet for tax purposes, the
net result is expected to be on par with the 2005 figure. We are also
maintaining our forecast that the number of passengers using Amsterdam Airport
Schiphol during the whole of 2006 will increase by approximately 4.2%.'
This release may contain certain forward-looking statements with respect to the
financial condition, results of operations and business of Schiphol Group and
certain of the plans and objectives of Schiphol Group with respect to these
items. By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will occur in the
future and there are many factors that could cause actual results and
developments to differ materially from those expressed or implied by these
forward-looking statements. Forward-looking statements and forecasts are based
upon current data and historical experience which are not necessarily indicative
of future outcomes or the financial performance of Schiphol Group and should not
be considered in isolation.
This is an English translation of the Dutch version of Schiphol Group's 2006
interim results. In the event of any disparity between the Dutch original and
this translation, the Dutch text will prevail.
Click the link below to view the full press release, including the balance
sheet, profit and loss account, statement of changes in shareholders' equity,
cash flow statement, accompanying notes and the accountant's review report.
Full Press Release (pdf)
Key figures
EUR million unless stated otherwise HY 06 HY 05* Change FY 05
Revenue 486.0 442.8 9.8% 948
Capital gains on investment property 16.1 6.4 151.2% 12
Operating expenses 362.7 323.0 12.3% 659
Operating result 139.4 126.3 10.4% 311
Result before tax 124.1 116.9 6.1% 279
Net result excluding capital gains on investment property 76.6 76.8 -0.2% 184
Result attributable to shareholders (net result) 88.0 81.2 8.4% 193
Depreciation, amortisation and impairment 82.0 83.4 -1.7% 167
EBITDA 1) 221.4 209.7 5.6% 478
CAPEX (Investments in intangible assets and property, plant and 103.7 150.3 -31.1% 268
equipment)
Cash flow from operating activities 2) 116.5 79.9 45.8% 300
Ratios
Earnings per share 514 474 8.4% 1,126
Interest coverage ratio 3) 7.0x 11.8x 9.1x
Leverage as at 30 June 28.8% 30.4% 29.4%
Business volume (in numbers) 5)
Air transport movements 214,993 208,769 3.0% 430,566
Passenger movements (x 1,000) 22,571 21,610 4.4% 46,152
Cargo (x 1,000 tonnes) 739 702 5.2% 1,450
*) Restated for comparison purposes
1) Operating result plus depreciation, amortisation and impairment
2) See cash flow statement for details
3) Operating result divided by net financial income and expenses
4) Carrying amount of interest-bearing debt/(total equity + carrying amount of
interest-bearing debt)
5) Schiphol Group: Amsterdam Airport Schiphol, Rotterdam Airport and Eindhoven
Airport
Net result
The result attributable to shareholders (net result) of Schiphol Group for the
first half of 2006 increased by 8.4%, from EUR 81.2 million to EUR 88.0 million.
This increase can be largely attributed to an increase in the capital gains on
the company's property portfolio, from EUR 6.4 million before tax in the first
of 2005 to EUR 16.1 million in 2006 (after tax
EUR 4.4 million and EUR 11.4 million respectively). Excluding capital gains on
investment property, the net result was 0.2% down, from EUR 76.8 million to EUR
76.6 million.
Revenue
Revenue during the first half of 2006 increased by 9.8%, from EUR 442.8 million
to EUR 486.0 million.
* Income from airport charges increased by 11.1% from EUR 265.2 million
to EUR 294.7 million. There was a 4.0% increase due to the greater numbers of
passengers and air transport movements, despite the latter effect being partly
cancelled out by a decrease in the average maximum takeoff weight (MTOW). And
there was a 7.8% increase due to increases in aircraft and passenger-related
charges coming into effect on 1 April 2006 and increases in the Security Service
Charge on 1 November 2005 and again on 1 April 2006;
* Concession income increased by 9.8% from EUR 58.3 million to EUR 64.0
million, this increase being largely attributable to the growth in passenger
numbers combined with an increase due to a higher average spend in the See Buy
Fly shops per passenger departing from Amsterdam Airport Schiphol on
international flights, which amounted to EUR 3.81 in the first half of 2006 (1st
half 2005: EUR 3.58);
* Rental income generated by property increased by 5.4%, from EUR 54.2
million to EUR 57.1 million, despite the sale of investment property to ACRE
Fund at the end of 2005;
* Income from car parking fees showed a rise of 6.8%, from EUR 36.5
million to EUR 39.0 million, mainly as a result of an increase in the length of
stay in the short-stay car parks and an increase in parking charges at Amsterdam
Airport Schiphol; and
* Income from other activities rose by 9.2%, from EUR 28.5 million to
EUR 31.1 million, on the strength of higher advertising revenues and higher
revenues generated by services and activities on behalf of third parties among
other factors.
Other property results
The other property-related results amounted to EUR 16.1 million, representing an
increase of EUR 9.7 million compared with the first half of 2005. This was due
to higher capital gains on investment property in 2006.
Operating expenses
The operating expenses for the first half of 2006 were up by 12.3%, from EUR
323.0 million to EUR 362.7 million.
* Total costs of outsourced work and other external charges rose by
22.6%, from EUR 163.0 million to EUR 199.8 million, the main factor here being
increased security costs at Amsterdam Airport Schiphol. Spending on security at
Amsterdam Airport Schiphol in the first half of 2006 totalled EUR 97.8 million.
Compared with the corresponding period in 2005, that represents an increase of
EUR 15.6 million (+19.0%). The item also includes an amount of EUR 4.9 million
for the cost of amelioration activities following oxygen depletion in surface
waters due to the effect of de-icing fluid. Energy costs were up by EUR 5.0
million, mainly due to increased charges. The remaining increase is accounted
for by the increased level of activities as a result of greater traffic volumes;
* Employee benefits increased by 3.9%, from EUR 72.8 million to EUR
75.7 million, chiefly as a result of a 2.3% rise in basic pay which came into
effect on 1 January 2006;
* Depreciation and amortisation charges were up by 4.4%, from EUR 78.5
million to EUR 82.0 million, following various assets becoming operational in
2005;
* No impairment losses were recognised in the first half of 2006,
compared with EUR 4.9 million in the first of 2005; and
* Other operating expenses increased by EUR 1.6 million, from EUR 3.7
million to EUR 5.3 million.
Operating result
The operating result for the first half of 2006 was up by 10.4%, from EUR 126.3
million to EUR 139.4 million. The net result for the first half of 2006, before
interest, tax, depreciation, amortisation and impairment (EBITDA) amounted to
EUR 221.4 million. The EBITDA figure for the corresponding period in 2005 was
EUR 209.7 million.
Financial income and expenses
Net financial income and expenses (net expense) for the first half of 2006 came
in at EUR 20.0 million. Compared with the corresponding period in 2005, that
represents an increase of EUR 9.4 million (87.6%). This increase is mainly
accounted for by translation differences on a loan denominated in Australian
dollars granted to our associate in Australia, which amounted to EUR 2.8 million
negative in 2006 and EUR 4.3 million positive in 2005.
Credit rating
Standard & Poor's (AA-) and Moody's Investor Service (Aa3) have reaffirmed their
credit ratings for N.V. Luchthaven Schiphol and Schiphol Nederland BV although S
&P did qualify that with a 'negative outlook' (previously 'stable'), owing to
the decision by the Upper House of Dutch Parliament concerning the privatisation
plans. Moody's maintained its 'stable outlook' qualification.
Events after the balance sheet date
The attacks recently foiled in the United Kingdom have resulted in heightened
security measures at airports, including Amsterdam Airport Schiphol. Since 10
August these measures have been restricted to intensified security control and a
ban on carrying liquids in hand baggage on flights to the U.S.A and on board
flights with US carriers. These restrictions will affect part of Schiphol
Group's concession revenue. In association with the U.S. authorities, it is
being examined whether these restrictions can be reduced.
Prospects
Schiphol Group's Board of Management is maintaining its profit projection
contained in the 2005 annual report. Our forecast takes into account the
measures taken as a result of the attacks recently foiled in the United Kingdom.
Excluding capital gains on property and proceeds from the sale of property, a
net result on par with that for 2005 is expected for the whole of 2006 (EUR 177
million).
This forecast does not take into account the good progress which has been made
in achieving agreement with the Dutch tax authorities concerning the
finalisation of the opening balance sheet for tax purposes as at 1 January 2002,
the date on which Schiphol Group became liable for corporate income tax. If
agreement is reached, this could result in a significant non-recurring tax
credit in the second half of 2006.
Capital expenditure over the whole of 2006 is expected to amount to around EUR
300 million; previous estimates had been a figure of EUR 360 million.
Developments in the individual business areas
Aviation
The Aviation business area, which looks after planning, coordination and
capacity management at Amsterdam Airport Schiphol, accounted for 60.5% of the
revenues generated by Schiphol Group in the first half of 2006 and 19.5% of the
operating result. The activities of the business area are regulated, i.e. the
maximum permitted return is capped by the government.
EUR million HY06 HY05 Change FY05
Revenue 294.2 264.9 11.0% 573
EBITDA 86.0 91.7 -6.2% 214
Operating result 27.2 35.3 -22.9% 99
CAPEX (Investments in intangible assets and 73.0 97.8 -24.4% 187
property, plant and equipment)
Amsterdam Airport Schiphol saw passenger numbers grow by 4.3% and the volume of
cargo grow by 5.2% in the first half of 2006. The number of air transport
movements increased by 2.9%. The average size of aircraft declined, however,
with the average MTOW falling by 1.3% from 100.0 to 98.7 tonnes.
Apart from the impact of these volume factors, Aviation revenues also benefited
from an average increase of 2% in takeoff and landing fees payable by airlines
using Amsterdam Airport Schiphol as from 1 April 2006. The Passenger Service
Charge for departing passengers was also increased by 2%. The Security Service
Charge for departing passengers rose by 7.4%, owing to increased security costs.
Despite the increase in the Security Service Charge, the income it generated
fell short of the actual costs of security in the first half of 2006 by EUR 3.9
million.
Aviation revenues in the first six months of 2006 were up by 11.0%, at EUR 294.2
million, but operating expenses increased by 16.3% to EUR 267.0 million. Apart
from higher security costs, there was also a strong increase in energy and
maintenance costs due to the prolonged winter and the problems this caused with
oxygen levels in the water in the drainage ditches.
The business area saw costs per workload unit (WLU), a measure of efficiency,
increase by 11.0% in the first half of 2006 compared with the first half of
2005, reaching a figure of EUR 9.19. One WLU equates to 1 passenger or 100 kg of
cargo. The increase was mainly attributable to higher security costs and
depreciation/amortisation charges. Eliminating the latter increases, costs per
WLU rose by 8.8%, from EUR 3.73 to EUR 4.06.
Investment at Amsterdam Airport Schiphol in the first half of 2006 totalled EUR
73.0 million, including new baggage handling facilities and the construction of
a new corridor between Pier B and Pier C. Further investments were again made in
security and fire safety, and major repairs were recently carried out on Runway
18C-36C. In June, KLM and Schiphol Group officially opened Europe's first
departure hall offering only self-service check-in facilities.
As in the closing months of 2005, the IR rate - the percentage of baggage items
that do not arrive at the destination at the same time as the passenger - was
lower than for the other major airports in Europe. Punctuality also developed
favourably during the first six months, with an improvement of 1.7 percentage
points to 82.0% for arrivals and 2.5 percentage points to 74.7% for departures.
Other developments relating to Aviation
At the end of June, the Upper House of Dutch Parliament passed the Amendment to
the act governing the operation of Amsterdam Airport Schiphol under which the
Netherlands Competition Authority (NMa) will in future be responsible for
overseeing the setting of aviation-related charges at Amsterdam Airport Schiphol
and the associated consultation process. Previously, this was the responsibility
of the Ministry of Transport, Public Works and Water Management.
Consumers
The Consumers business area, which looks after the operation of concessions (for
shops, bars and restaurants etc.), car parks and advertising at Amsterdam
Airport Schiphol, accounted for 22.5% of the revenues generated by Schiphol
Group in the first half of 2006 and 46.0% of the operating result. The business
area is also active outside the Netherlands.
EUR million HY06 HY05 Change FY05
Revenue 109.5 90.9 20.5% 195
EBITDA 72.0 63.2 13.9% 140
Operating result 64.1 56.0 14.5% 125
CAPEX (Investments in intangible assets and 5.2 4.2 24.6% 16
property, plant and equipment)
The operating result for the Consumers business area in the first half of 2006
was up by EUR 8.1 million, at EUR 64.1 million. Concession income from the See
Buy Fly shops at Amsterdam Airport Schiphol increased by EUR 4.3 million
(+11.8%) to EUR 40.8 million on the strength of higher passenger numbers and a
higher average spend. The increase in spending followed the introduction of more
competitive product pricing, the new See Buy Fly 'Buy Bye' campaign and growing
consumer confidence.
As a result, concession income from the See Buy Fly operations per departing
passenger on international flights at Amsterdam Airport Schiphol showed an
increase of 6.4% in the first half of the year, from EUR 3.58 to EUR 3.81. The
income from other concessions rose by EUR 2.1 million, mainly as a result of
increased spending on food and drinks.
In 2006, first-half revenue included income from rents and leases totalling EUR
6.1 million, largely made up of rents paid by concession holders. In 2005, this
income was recognised by the Real Estate business area.
Income generated by parking at Amsterdam Airport Schiphol increased by 6.3%, or
EUR 2.1 million, to EUR 35.6 million, partly owing to a longer average stay in
the short-stay car parks. Parking revenues per passenger, excluding transfer
passengers, accordingly showed an increase, of 0.7%, from EUR 2.87 in 2005 to
EUR 2.89 in 2006.
Advertising income was up by 29.2%, at EUR 6.2 million. This was largely the
result of offering new spaces for carrying outdoor advertising.
CAPEX by the Consumers business area in the first six months of 2006 totalled
EUR 5.2 million. In the area after passport control, the first airport lounges
were opened. These are areas where companies can receive their important
customers prior to departure. ABN Amro and the business travel specialists BCD
Travel are the first users of these new facilities.
The Saphire loyalty programme at Jakarta International Airport was launched,
enabling members to use an automated border passage system employing iris
recognition to clear passport control quickly. Saphire is based on the Privium
programme that was introduced at Amsterdam Airport Schiphol in 2001 and now has
30,000 members.
Other developments relating to Consumers
Effective 1 January 2007 Schiphol Group plans to take over the liquor and
tobacco concession in the See Buy Fly area, currently operated by KLM Tax Free
Services, whose contract expires on 31 December 2006. This move is in line with
the strategy of strengthening retail activities being pursued by the Consumers
business area. A memorandum of understanding was signed on 5 July 2006,
including an undertaking that the takeover of the six shops and 150 staff will
be effected in such a way as to guarantee the continuity of the activities. This
means, among other things, that the staff will become employees of Schiphol
Group. A due diligence investigation has yet to be conducted by Schiphol Group
in the second half of the year.
Real Estate
The Real Estate business area, which looks after the development, management and
letting of the Group's property at and around Amsterdam Airport Schiphol and
other airports in the Netherlands and abroad accounted for 10.8% of the revenues
generated by Schiphol Group in the first half of 2006 and 32.5% of the operating
result.
EUR million HY06 HY05 Change FY05
Revenue 52.4 55.6 -5.8% 116
Result on sale of investment property 0.0 0.0 - 10
Capital gains on investment property 16.1 5.5 193.5% 11
EBITDA 55.7 44.2 26.0% 102
Operating result 45.3 28.7 57.9% 78
CAPEX (Investments in intangible assets and property, 22.8 34.0 -32.9% 50
plant and equipment)
The operating result of the Real Estate business area for the first half of 2006
rose by EUR 16.6 million, largely owing to higher unrealised capital gains and
the absence of any impairment losses on the property portfolio. Excluding
capital gains on investment property, the operating result was up by 25.7%, from
EUR 23.2 million to EUR 29.2 million.
The 2005 revenue figure included income from concession holders' leases. With
effect from 2006, these revenues (up to EUR 6.1 million) have been recognised by
the Consumers business area.
The capital gains on the property portfolio in the first six months of 2006
amounted to EUR 16.1 million, compared with EUR 5.5 million in the first half of
2005, the increase being due to the completion of new properties, the issue of
new long lease contracts and an increase in the appraised values of existing
properties.
No properties were sold in the first half of 2006, in contrast to the first half
of 2005, when property valued at EUR 9.5 million was sold to ACRE Fund, for
which the carrying amounts (based on fair value) were practically the same as
the proceeds from the sale.
The average occupancy figure for the property at Amsterdam Airport Schiphol rose
from 85.4% as at the end of June 2005 to 85.7% at the end of June 2006.
CAPEX on the part of the Real Estate business area in 2006 totalled EUR 22.8
million. A start was made with the construction of a multi-tenant office
building at Schiphol Centre, which will be home to Microsoft among other
companies and will have a floor area of
32,000 m2. A start was also made with the construction of Cargo Building 9 at
Cargo World Schiphol Southeast. Menzies Aviation and Skylink, two cargo handling
agents, will be leasing 75% of this building, which will have a warehouse area
of 24,600 m2 and 3,900 m2 of office space.
Yusen Air & Sea Service (Yusen) and Eagle Global Logistics (EGL) moved into new
cargo buildings in Cargo World Schiphol Southeast. The old Yusen building at
Schiphol Southeast has been acquired and has now been leased to Rutges Air
Cargo.
Leasehold land has been released in RTM Airpark at Rotterdam Airport on which
MiraTes Europe, manufacturer of diagnostic self-testing products, is to build a
head office with a floor area of approximately 2,000 m2. A memorandum of
understanding has been signed with the construction group Dura Vermeer for the
release of land on a leasehold basis for the construction of an office building
with a floor area of approximately 12,000 m2.
Other developments relating to Real Estate
At Malpensa Airport in Italy, a start has been made with the construction of a
second line cargo building with an area of 12,000 m2, due for completion by the
end of the year. A start has also been made with site preparation for the
construction of the first office building in the MXP Business Park adjacent to
Malpensa Airport.
Alliances & Participations (A&P)
The Alliances & Participations business area is responsible for operating
Rotterdam Airport, Eindhoven Airport and Lelystad Airport, for managing the
investments in JFK IAT, which manages Terminal 4 at New York's John F. Kennedy
Airport, and in Brisbane Airport and for managing the Utilities business. The
latter business comprises the revenues from the supply of electricity, gas and
water to third parties. In the first half of 2006, the business area accounted
for 6.2% of Schiphol Group's revenues and 2.0% of the operating result.
EUR million HY06 HY05 Change FY05
Revenue 29.9 31.4 4.8% 64
Capital gains on investment property 0.0 0.9 -100.0% 1
EBITDA 7.6 10.6 -28.6% 22
Operating result 2.8 6.3 -56.3% 9
CAPEX (Investments in intangible assets and 2.7 14.3 -81.1% 24
property, plant and equipment)
The international activities of the Alliances & Participations business area
contributed a total of EUR 6.9 million in the form of interest income and
dividends to Schiphol Group's result before tax (1st half 2005: EUR 3.6
million). The biggest contribution was made by the Brisbane Airport associate
(EUR 6.3 million).
The Alliances & Participations operating result for the first half of 2006 was
down by EUR 3.5 million, mainly owing to a drop of EUR 0.9 million in the share
of the results of the associates in the Netherlands and the drop of EUR 2.3
million in the Utilities result. The lower Utilities result is partly explained
by non-recurring income of EUR 1.2 million in 2005.
The number of passengers using Terminal 4 at JFK Airport, New York, in the first
six months of 2006 rose by 10.5% to more than 3.4 million and, in the first six
months of 2006, almost 7.8 million passengers travelled through Brisbane
Airport, which was 4.0% up on 2005.
Passenger numbers at Eindhoven Airport in the first half of the year were up by
22.1%, at 507,000, with the strongest growth accounted for by the low-cost
carriers (+32%). The number of passengers using Rotterdam Airport in the first
six months was down by 4.4%, at not quite 516,000, as a result of a
disappointing first quarter.
Other developments relating to A&P
At the beginning of 2006, Schiphol Nederland B.V. and KPN Telecom B.V., the
limited partners in the Schiphol Telematics C.V. joint venture, reached heads of
agreement on the division of the Schiphol Telematics joint venture activities
carried on by Schiphol Group and KPN into a 'service business' and a 'network
business'. The network business is to be continued by Schiphol Telematics C.V.
and its net assets have therefore been attributed to Schiphol Group. The service
business has been attributed to KPN.
Schiphol International is bidding for a possible strategic partnership with
Nanjing Lukou International Airport in China. As part of the proposed alliance
there is also the possibility of investing in the share capital of the airport.
There is another contender in the race for the acquisition of a minority
interest in Nanjing Airport.
Click the link below to view the full press release, including the balance
sheet, profit and loss account, statement of changes in shareholders' equity,
cash flow statement, accompanying notes and the accountant's review report.
Full Press Release (pdf)
Interim consolidated financial report
Consolidated balance sheet as at 30 June 2006
Consolidated profit and loss account for the 1st half 2006
Condensed consolidated statement of changes in shareholders' equity
Other reserves comprises the translation differences reserve and the reserve for
hedging transactions. The movement in the reserve for hedging transactions as at
30 June 2006 amounted to EUR 8.9 million, mainly relating to the fair value
movements on the EMTN loans and the associated derivatives.
After the resolution approving the proposed profit appropriation presented in
the 2005 financial statements was passed by the General Meeting of Shareholders
held on 13 April 2006, a dividend totalling EUR 55.3 million was distributed to
the shareholders in the first half of 2006. This corresponds to a dividend of
EUR 323 per share.
Condensed consolidated cash flow statement for the 1st half 2006
Notes to the interim consolidated financial report
General information
N.V. Luchthaven Schiphol is a public limited liability company (an NV - a large
company within the meaning of the Netherlands Civil Code), based at Schiphol in
the municipality of Haarlemmermeer. The address of the company's registered
office is Evert van der Beekstraat 202, 1118 CP, Schiphol, the Netherlands. N.V.
Luchthaven Schiphol trades under the name of Schiphol Group.
Schiphol Group is an airport operator. It is Schiphol Group's ambition to rank
among the world's leading airport companies. The company's aim is to create
sustainable value for its stakeholders by developing AirportCities and by
positioning Amsterdam Airport Schiphol as the leading AirportCity.
Accounting policies
This interim consolidated financial report ('report') has been prepared in
accordance with
IAS 34 Interim Financial Reporting. This report has not been audited. This
report should be read in conjunction with the Schiphol Group financial
statements for the year ended 31 December 2005.
Full details of the accounting policies used in this report can be found in the
2005 financial statements. There has been no change in the accounting policies
since 31 December 2005. These accounting policies are in accordance with IFRS(1)
and have been consistently applied to all the information presented in this
report except where otherwise indicated. The new IFRS standards published during
the first half of 2006 which will be mandatory for financial years ending 31
December 2006 do not apply to Schiphol Group. Schiphol Group has not voluntarily
applied any IFRS standards not coming into force until a later date in this
interim report either.
Financial information is presented in thousands of euros except where otherwise
stated.
Transition to IFRS
The figures for the first half of 2005 contained in this report have been
restated for comparison purposes. This restatement follows the transition to
IFRS and concerns changes which became known after publication of the half-year
results for 2005.
The main change subsequently implemented concerns the translation differences on
the redeemable preference shares (RPFs) of Brisbane Airport Corporation Holdings
Pty Ltd. (BACH) held by Schiphol Group. Under IFRS, these RPFs are treated as a
long-term receivable from the associate instead of an investment in the
associate. As a consequence, the translation differences have to be recognised
in the profit and loss account (other financial income and expenses) instead of
in the translation differences reserve. In the first half of 2005, these
translation differences amounted to EUR 4.3 million positive.
Information on seasonal effects
Operating airports is a seasonal business. The income and expenses included in
this report for the first six months of 2006 relate to approximately 48% (first
six months of 2005: 48%) of the expected air transport movements for the full
year and approximately 47% (first six months of 2005: 47%) of the expected
passenger movements for the full year.
Segment information
Revenue analysed by business segment was as follows:
The operating result analysed by business segment was as follows:
Other notes
1. Property, plant and equipment
Investments in property, plant and equipment amounted to EUR 103.7 million in
the first half of 2006 compared with EUR 150.3 million in the corresponding
period in 2005. The main projects were the construction of new baggage handling
facilities and a new corridor between Pier B and Pier C. Investments were also
made in new real estate projects and in security and fire safety.
2. Non-current liabilities
Loans
Schiphol Group repaid a net amount of EUR 4.1 million of the company's loans in
the first half of 2006.
Other provisions
It was established in 2004 that Schiphol Group faced a liability in connection
with several claims and disputes. As in 2005, the provision of EUR 10 million
recognised in respect of the combined amount of these claims and disputes in
2004 remained unchanged in 2006.
The most important of the above claims and disputes concerns the legality of the
ban on the development of the Groenenberg site. If development were to take
place on the Groenenberg site, it could seriously compromise the use of Runway
18L-36R. The State Secretary at the Ministry of Transport, Public Works and
Water Management accordingly issued a ban on development for this site under the
provisions of Section 38 of the Aviation Act (old act). In June 2003, the owner
of the site filed a claim against Schiphol Group for the losses resulting from
the imposition of this development ban. On 12 January 2005, the Court at Haarlem
ruled in an interlocutory judgment that Schiphol Group was liable to pay
compensation of an amount to be fixed by a panel of experts. In July 2006, the
panel of experts produced its final recommendations for the Court, setting the
amount of the compensation (excluding interest payable with effect from 19
February 2003 up to the date of final judgment by the Court) at EUR 17.3
million.
Since the Court has not yet given its final decision concerning the amount of
compensation payable, the Board of Management takes the view that the estimate
made at the time of preparing the financial statements for 2005 does not
currently need to be revised.
Of possible relevance to the Court's final decision concerning the amount of the
compensation is the status of the development ban. In response to an inquiry by
the Ministry of Transport, Public Works and Water Management and after
consultation with Air Traffic Control the Netherlands, Schiphol Group has
replied that, under certain conditions, the amended development plans of the
owner of the Groenenberg site would no longer impose any capacity restrictions
on Runway 18L-36R. The State Secretary at the Ministry of Transport, Public
Works and Water Management has not rejected Schiphol Group's application to have
the development ban lifted but, before reaching a final decision, the State
Secretary has given Chipshol and the Haarlemmermeer Municipal Authority the
opportunity to express their views regarding her intention to lift the ban
either entirely or partially. If Chipshol were to apply for a new building
permit, the Haarlemmermeer Municipal Authority would, in principle, grant
permission. If the Ministry decides to lift the development ban and Chipshol's
development plan is approved, that should reduce the amount of the losses.
3. Current liabilities
At the beginning of 2006, Schiphol Nederland B.V. and KPN Telecom B.V., the
limited partners in the Schiphol Telematics B.V. joint venture, reached heads of
agreement on the exit of KPN from the joint venture with effect from 1 January
2006. Schiphol Telematics C.V. continues in existence with Schiphol Group as
limited partner and Schiphol Telematics B.V. as managing partner. The activities
of the joint venture have been split into a 'service business' and a 'network
business'. The network business is to be continued by Schiphol Telematics C.V.
and its net assets have therefore been attributed to Schiphol Group. The service
business has been attributed to KPN.
In view of the above, the network business has been included in full in the
Schiphol Group consolidation with effect from 1 January 2006 and the Group's
share of the service business has ceased to be included in the consolidation
with effect from the same date. In connection with the purchase of the KPN share
in the network business and the sale of the
Schiphol Group share in the service business, a net current liability to KPN
amounting to EUR 8.3 million was recognised in the balance sheet as at 30 June
2006.
4. Revenue
The analysis by activity and business segment is as follows:
A large part of the rents and leases income of the Consumers business area in
2006 comprises income from letting space to concession holders. In 2005, this
income was still recognised by the Real Estate business area.
5. Capital gains on property
Capital gains on the property portfolio in the first six months of 2006 amounted
to EUR 16.1 million compared with EUR 5.5 million in the first half of 2005.
This increase was due to the completion of new properties, the issue of new long
lease contracts and an increase in the appraised values of existing properties.
Contingent assets and liabilities
General
The 2005 financial statements included a note on the contingent assets and
liabilities as at
31 December 2005. No new contingent assets and liabilities of a material nature
have been identified during the first half of 2006 nor have there been any
important developments relating to the existing contingent assets and
liabilities as at 31 December 2005, apart from the following:
Corporate income tax
With effect from 1 January 2002, Schiphol Group has been subject to corporate
income tax. In 2003, Schiphol Group prepared the opening balance sheet for tax
purposes and a tax return was filed for 2002. In the first half of 2006,
Schiphol Group management and the tax authorities made good progress on reaching
agreement regarding the opening balance sheet for tax purposes. The Board of
Management expects the company's tax assessment to be finalised, allowing the
necessary agreement to be signed by both parties in the second half of 2006.
According to the position currently reached, the fiscal equity of Schiphol
Nederland B.V. as at 1 January 2002 is over EUR 1 billion higher than the
equity for reporting purposes, chiefly owing to higher fiscal valuation of land.
This land is carried at cost for reporting purposes. In the opening balance
sheet for tax purposes, it is included at fair value as at 1 January 2002. The
difference between the fiscal equity and the reported equity gives rise to a
deferred tax asset and to a non-recurring tax credit to be recognised in the
second half of 2006 which is likely to be material.
KLM concessions
Schiphol Group plans to take over the liquor and tobacco concession in the See
Buy Fly area, currently operated by KLM Tax Free Services, whose contract
expires on 31 December 2006. The acquisition of the liquor and tobacco
concession is in line with the strategy of strengthening retail activities being
pursued by the Consumers business area. Schiphol Nederland B.V. and Koninklijke
Luchtvaartmaatschappij N.V. signed a memorandum of understanding on the
transaction on 5 July 2006. The acquisition relates to six shops and
approximately 150 staff. The memorandum of understanding provides for the
takeover to be effected in such a way as to guarantee the continuity of the
activities. This means, among other things, that all assets and contracts
relevant to the performance of the activities concerned will be taken over and
that the staff will become employees of Schiphol Group
and keep their existing jobs. A due diligence investigation has yet to be
conducted by
Schiphol Group in the second half of the year and allocation of the purchase
price to the various assets and liabilities acquired will be performed.
To: the Annual Meeting of Shareholders
Report on review of interim financial information
Introduction
We have reviewed the accompanying consolidated balance sheet of N.V. Luchthaven
Schiphol as of 30 June 2006, the related consolidated statement of income and
the condensed consolidated statements of changes in equity and cash flows for
the six-month period then ended. Management is responsible for the preparation
and presentation of this consolidated condensed interim financial information in
accordance with International Financial Reporting Standards as adopted by the EU
applicable to interim financial reporting ("IAS 34"). Our responsibility is to
express a conclusion on this interim financial information based on our review.
Scope of review
We conducted our review in accordance with the Netherlands Standard on Reviews
of Historical Information 2410N ("Opdrachten tot het beoordelen van tussentijdse
berichten") issued by the Netherlands Institute of Registeraccountants. A review
of interim financial information consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope
than an audit conducted in accordance with auditing standards generally accepted
in the Netherlands and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying consolidated condensed interim financial information is
not prepared, in all material respects, in accordance with IAS 34.
Amsterdam, 23 August 2006
PricewaterhouseCoopers Accountants N.V.
J.A.M. Stael RA
--------------------------
(1) Any reference to IFRS means the entire set of rules included in
International Accounting Standards (IAS), International Financial Reporting
Standards (IFRS) and Standing Interpretations of the International Financial
Reporting Interpretations Committee (IFRIC) as endorsed for use in the EU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PIMRTMMMTMRF
First Adb 28 (LSE:AR77)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
First Adb 28 (LSE:AR77)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
