RNS Number : 7790B
Schiphol Nederland B.V.
21 August 2008
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Schiphol Group: Net result (excluding fair value gains on property and excluding a non-recurring tax credit in 2007) for first half of
2008 declined by 8.3% compared to corresponding period of 2007
Concerns about competitive position of Schiphol
Press Release
Schiphol, 21 August 2008
* The net result reported by Schiphol Group, including fair value gains on property, for the first half of 2008 decreased by 32.9%
compared with the corresponding period in 2007, from EUR 142.8 million to EUR 95.8 million.
* Excluding fair value gains on property amounting to EUR 9.9 million (2007: EUR 45.3 million), the net result decreased by 18.9%,
from EUR 109.1 million to EUR 88.4 million.
* Excluding fair value gains on the property portfolio and excluding a non-recurring tax credit of EUR 12.7 million in 2007, the net
result decreased by 8.3%, from EUR 96.4 million to EUR 88.4 million.
* Schiphol Group's revenue for the first half of 2008 increased by 1.7%, from EUR 540.2 million to EUR 549.5 million.
* The operating result declined by 23.5%, from EUR 179.3 million to EUR 137.2 million.
* EBITDA declined by 16.3%, from EUR 265.2 million to EUR 221.9 million.
* Earnings per share decreased by 32.9%, from EUR 834 to EUR 559.
Summary of main business results
* The number of passengers using Amsterdam Airport Schiphol, Rotterdam Airport and Eindhoven Airport rose by 2.1% to 24.1 million,
of whom 22.8 million travelled through Amsterdam Airport Schiphol (+2.0%).
* Owing primarily to the generic reduction of the airport charges for Amsterdam Airport Schiphol by an average of 8.7% from 1
November 2007, the revenue from airport charges fell by 2.6% in the first half of 2008.
* The costs of the government imposed security measures at Amsterdam Airport Schiphol increased by EUR 4.5 million (+4.5%) to EUR
105.5 million. The revenue from the Security Service Charge in the first half of 2008 lagged behind by EUR 5.0 million.
* The Consumers business area, by now accounting for almost 50% of the operating result, saw its operating result rise by EUR 2.1
million, in particular because of increased revenue of the See Buy Fly shops and well-frequented new catering outlets.
* The increase in fair value gains on the property portfolio of the Real Estate business area was much smaller: EUR 9.9 million
compared with EUR 45.3 million in 2007. This is primarily because no property completions and sales took place in the first half of 2008.
* The international activities of the Alliances & Participations business area contributed EUR 9.3 million to the result before tax
for Schiphol Group in the form of interest income and dividends (first half of 2007: EUR 11.2 million).
Gerlach Cerfontaine, President & CEO of Schiphol Group, commented:
The first half of 2008 was positive with regard to the net result and the development of passenger volume. As we stated earlier this
year, there will be little or no increase in the number of passengers using Amsterdam Airport Schiphol for 2008 as a whole, partly because
of the introduction of the Air Passenger Tax on 1 July 2008. This tax measure - in combination with the increasing security costs -
threatens to adversely affect the competitive position of Schiphol. Moreover, we believe it is highly likely that, as a consequence of the
high kerosene prices and the worldwide deterioration of the economic climate, passenger volume in 2009 will, again, show no growth."
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 2007 interim results. In the event of any disparity between the
Dutch original and this translation, the Dutch text will prevail.
Key figures
1) EBITDA: operating result plus depreciation, amortisation and impairment
2) Leverage: Interest-bearing debt / (equity plus interest-bearing debt) as a %
3) Funds from operations / interest expenses of borrowings and lease obligations
4) Concerns Schiphol Group: Amsterdam Airport Schiphol, Rotterdam Airport and Eindhoven Airport
Revenue
The revenue reported by Schiphol Group for the first half of 2008 amounted to EUR 549.5 million. Compared to the EUR 540.2 million
achieved during the corresponding period in 2007, this represented an increase of 1.7%.
The revenue is divided among the four business areas as follows:
The revenue is divided as follows among the various revenue categories:
The net revenue from airport charges fell by EUR 8.2 million. This includes a decrease of EUR 17.8 million on account of the generic
reduction, imposed by the Netherlands Competition Authority (NMa), of the charges for Amsterdam Airport Schiphol with effect from 1 November
2007. This tariff reduction is compensated in part by a rise in passenger numbers and an increase in the average take-off weight.
* Adjusted for comparison figures (see page 13)
Other property results
The other property results amounted to EUR 9.9 million, which is EUR 38.2 million lower than in the first half of 2007 (EUR 48.1
million). This is because of a relatively large increase in the value of the property portfolio in 2007, and because no property sales and
completions took place in 2008, whereas this had been the case in 2007.
Operating expenses
The operating expenses for the first half of 2008 increased by 3.2% to EUR 422.2 million.
* Total costs of outsourced work and external charges rose by 4.9% from EUR 231.8 to EUR 243.1 million. The costs for security at
Amsterdam Airport Schiphol increased in the first half of 2008, compared to the corresponding period in 2007, by EUR 4.5 million (+4.5%) to
EUR 105.5 million. The increase is also attributable to higher costs of other outsourced work (EUR 5.2 million), of maintenance in
connection with plans postponed to 2008 (EUR 1.7 million), of energy and water because of price increases and a rise in consumption (EUR 1.5
million) and of hiring external staff (EUR 1.6 million). These cost increases are compensated in part by lower consultancy fees (EUR 2.9
million).
* Employee benefits rose by 6.2%, from EUR 84.5 million to EUR 89.7 million. This is partly the result of the increase in the
average number of staff by 44 FTEs (+1.8%) to 2,490 FTEs in 2008. In addition, the increase in staff costs is partly attributable to the
general 2.75% salary increase as at 1 April 2007 and 1 April 2008, in conformity with the new Collective Labour Agreement concluded in the
spring of 2007.
* Depreciation and amortisation charges decreased by 1.3%, from EUR 85.9 to EUR 84.7 million.
Operating result
The operating result for the first half of 2008 declined by 23.5%, from EUR 179.3 million to EUR 137.3 million.
The 1.7% increase in revenue is lower than the rise in operating costs of 3.2%, which is mainly related to a decline in the revenue
from airport charges of EUR 17.8 million in 2008 as a result of the generic reduction by an average of 8.7% in airport charges from 1
November 2007. Adjusted for this effect, the net revenue would have increased by 5.0%.
EBITDA (the operating result after depreciation, amortisation and impairment) amounted to EUR 221.9 million, compared to EUR 265.2
million in 2007.
Financial income and expenses
Financial income and expenses (net expense) for the first half of 2008 amounted EUR 15.4 million, compared to EUR 14.5 million for the
corresponding period in 2007. This is due primarily to a lower average net amount of cash and cash equivalents.
Net result
For the first half of 2008, the net result of Schiphol Group declined by 32.9%, from EUR 142.8 million to EUR 95.8 million. This
increase can be partly attributed to the smaller increase in the value of the company's property portfolio of EUR 7.4 million in the first
half of 2008, compared with EUR 33.7 million after tax in the first half of 2007 (before tax EUR 9.9 million and EUR 45.3 million
respectively). In addition, a non-recurring tax credit of EUR 12.7 million is accounted for in the net result for 2007, arising from the
provisional settlement of the tax return for 2004. Excluding the fair value gains on property and the non-recurring tax credit, the net
result declined by 8.3%, from EUR 96.4 million to EUR 88.4 million. This remaining difference can be explained by an increase in net revenue
(EUR 9.3 million) despite the generic reduction of airport charges imposed as at 1 November 2007, and by a decline in the result on property
sales (EUR 2.8 million), higher operating expenses (EUR 13.3 million) relating in particular to the security measures imposed by the government, a higher net amount of financial expenses (EUR 0.9 million),
a lower share in results of associates (EUR 1.4 million) and higher tax on profits because of a higher pre-tax result after adjustments (EUR
0.8 million).
Prospects
Schiphol Group's Board of Management is maintaining its profit projection contained in the 2007 annual report. The net revenue for the
whole of 2008, excluding fair value gains on property, is expected to be lower than that for 2007, partly on account of the introduction of
the Air Passenger Tax on 1 July 2008.
Capital expenditure for 2008 is expected to be around EUR 125 million less than the earlier estimate of EUR 550 million, primarily
because of lower capital expenditure by the Consumers and Real Estate business areas. Developments in the individual business areas
Aviation
The Aviation business area operates solely at Amsterdam Airport Schiphol. Aviation provides services and facilities to airlines,
passengers and handling agents. The Netherlands Competition Authority (NMa) regulates the charges which are levied and sets limits on the
returns generated. Sources of revenue: airport charges (aircraft, passenger and security charges) and concession fees (paid by oil companies
for the right to provide aircraft refuelling services). In the first half of 2008, the business area accounted for 54% of Schiphol Group's
revenues and 14% of the operating result.
In the first six months of 2008, the revenue reported by Aviation declined by 2.3% to EUR 299.8 million, due to a 3.5% decrease in
revenue from airport charges to EUR 287.1 million.
This is primarily attributable to the generic reduction in airport charges by an average of 8.7% from 1 November 2007. Another reason
for this decline is the fall in the number of air transport movements by 0.6% to 211,531.
The effect of this reduction in charges is compensated by an increase in the number of passengers by 2.0% to 22.8 million and in the
average MTOW with 2.2%, from 97.3 to 99.4 tonnes, the latter of which is a consequence of the use of larger aircraft on average.
Additional security measures caused a 4.5% increase in the security costs compared with the first half of 2007, to EUR 105.5 million.
Because of this cost increase, the loss on security activities went up from EUR 0.5 million in the first half of 2007 to EUR 5.0 million in
the first half of 2008.
Operating expenses rose by 1.4% to EUR 280.4 million. Apart from security, the costs of hired and company staff also rose. The costs of
depreciation, however, decreased as a result of the accelerated depreciation in 2007 of the surface of Runway 18L-36R, and because the
depreciation period of various assets, such as the operating system of the baggage system, came to an end in 2008.
The business area saw the costs per workload unit (WLU), a measure of efficiency, decrease by 1.9% in the first half of 2008 compared
with the first half of 2007, reaching a figure of EUR 9.07. One WLU equals one passenger or 100 kg cargo.
Investment in property, plant and equipment at Amsterdam Airport Schiphol in the first half of 2007 totalled EUR 86.8 million, including
new baggage handling and security facilities.
In the first six months of 2008, the IR rate - the percentage of baggage items that do not arrive at the destination at the same time as
the passenger - was better than that of London Heathrow and Paris Charles de Gaulle, but worse than that of Frankfurt.
The punctuality rate for arriving flights was 80.8% in the first half of 2008, which is 0.2 percentage points lower than in 2007
(81.0%); for departing flights the punctuality rate fell by 1.4 percentage points, from 71.9% to 70.5%. This is mainly due to the bad
weather and snow in March.
Developments in charges
From 1 November 2007 charges for Aviation had to be reduced by an average of 8.7%, because according to the NMa a number of cost items
incurred by Aviation in 2005 and 2006 should not have been settled in the charges. Schiphol Group has lodged an appeal against this NMa
decision, but does not expect that the judgment on this appeal will be rendered until the fourth quarter of 2008 at the earliest.
In 2008, an EU regulation entered into force concerning the rights of disabled persons and persons with reduced mobility when travelling
by air. The People with Reduced Mobility Committee (PRM Committee), a collaborative venture between Schiphol Group, the Schiphol Airline
Operators Committee and the Dutch Council of the Chronically Ill and the Disabled, implements this regulation. A PRM levy of EUR 0.22 per
departing passenger was agreed in order to evenly spread the costs among all the passengers using the airport (as stipulated in the
regulation). The levy took effect on 14 January 2008.
The NMa has not received any applications to amend the charges we have set with effect from 1 November 2008. The deadline for submitting
an application expired on 27 June 2008. We will therefore introduce these charges with effect from 1 November 2008.
Other developments
KLM and BARIN instituted legal proceedings against the NMa's adoption of the airport charges allocation system (Schiphol Group joined
the NMa as a party in this case). The hearing of the case took place on 22 February 2008. The Court rejected the airlines on seven points
and ordered the NMa on one point to substantiate its decision in more detail, expressly pointing out that this meant that the decision had
been insufficiently substantiated in this respect, rather than that the allocation was incorrect on this point.
On 30 May 2008, Schiphol Group provided the NMa with the Regulatory Accounts 2007, compiled in accordance with Section 8.25g(4) of the
Aviation Act, and made these accounts available to the airlines.
Consumers
The activities of the Consumers business area concern the independent operation of retail outlets and car parks, the granting of
concessions for airport shopping and caf bar and restaurant facilities, and the marketing of advertising opportunities at Amsterdam Airport
Schiphol. The business area also has activities outside the Netherlands, such as the operation of retail outlets via management contracts.
Sources of revenue: retail sales, parking fees, concession fees, advertising and management fees.
In the first half of 2008, the business area accounted for 27% of Schiphol Group's revenue and almost 49% of the operating result.
*) Restated for comparison purposes (see page 13)
In the first six months of 2008, revenue rose by 7.7 million (+5.6%) to EUR 146.5 million.
Concession income rose by EUR 1.2 million, mainly due to higher concession income of See Buy Fly (EUR 0.4 million) and from other
concessions (bars and restaurants) (EUR 0.6 million).
The higher concession income of See Buy Fly was caused primarily by an increase in the number of departing passengers on international
flights and better concession rates. The average See Buy Fly spending per international departing passenger at Amsterdam Airport Schiphol
decreased by 3.6% in the first half year, from EUR 16.55 to EUR 15.96, mainly because of the worsening economic climate worldwide and the
unfavourable exchange rates of the dollar and Sterling.
The higher concession income from catering is attributable to well-frequented new landside and airside catering outlets, such as
Starbucks. Since 1 January 2008, the airport is a smoke-free area. The effect of this measure on catering sales in the first half of 2008
was moderate.
Income generated from parking at Amsterdam Airport Schiphol increased by 6.6%, or EUR 2.5 million, to EUR 40.4 million, due to a longer
average parking duration and an increase in fees. Parking revenues per passenger residing in the Netherlands, excluding transfer passengers,
increased by 4.4%, from EUR 8.76 in 2007 to EUR 9.15 in 2008.
Income from retail sales (liquor and tobacco) went up by EUR 1.9 million, mainly because of an increase in the number of retail
outlets.
Income from offering advertising opportunities rose in the first half of 2008 by EUR 1.7 million (+ 28.3%) compared with the first half
of 2007, owing to a better sales performance and an increase in the number of media objects.
Operating expenses increased, among other things because of higher staff costs at Schiphol Airport Retail BV and parking costs on
account of a rise in the number of FTEs, and because of higher depreciation costs owing to the capitalisation of a number of large projects
at the end of 2007.
Compared to the first six months of 2007 the investments in fixed assets decreased by EUR 35.4 million to EUR 8.8 million. This is
largely explained by the fact that investments in 2007 involved contract-related intangible fixed assets in connection with the takeover of
liquor and tobacco retail activities.
February saw the opening of the first airport spa at Amsterdam Airport Schiphol, in Departure Lounge 2. This XpresSpa offers beauty and
wellness services and sells a limited range of retail products.
The Privium programme, which was introduced at Amsterdam Airport Schiphol in 2001 and, among other things, enables frequent travellers
to clear passport control quickly by using an iris scan system, now has nearly 47,000 members, an increase of 9,000 compared with the end of
the first half of 2007.
New collaborative ventures
In March, a collaboration agreement was signed with Guangzhou Baiyun International Airport regarding the development of commercial
activities at this Chinese airport. The collaboration contract has a term of two years, with the option of renewal.
Real Estate
The Real Estate business area develops, manages, operates and invests in property at and around airports at home and abroad. The greater
part of the portfolio, comprising both airport buildings and commercial properties, is located at and around Amsterdam Airport Schiphol.
Sources of revenue: rents, including ground rents. The business area also makes a significant contribution to Schiphol Group results via
other property results (sales, the fair value gains or losses on property and the lease of land).
In the first half of 2008, Real Estate accounted for 12% of Schiphol Group's revenues and 32% of the operating result.
Revenue rose by 7.6% from EUR 61.0 million to 65.5 million, due inter alia to indexation and growth in the property portfolio from
480,809 m2 as at June 2007 to 488,461 m2 as at June 2008. The occupancy rate of the properties owned by the business area decreased from
93.4% as at June 2007 to 92.7%% as at June 2008. This decrease was caused by the completion of a few new buildings in 2007 which are not yet
fully leased. The revenue from other activities decreased from EUR 5.4 to EUR 3.8 million, primarily due to lower proceeds from work for
third parties.
In the first half of 2008, the fair value gains on property amounted to EUR 9.7 compared to EUR 45.4 million in the first half of 2007.
The slowdown in fair value gains is attributable to stabilisation of capital growth development in the overall property market and the lack
of completions in the first half of 2008. In the first half of 2007, property completions generated fair value gains of EUR 29.5 million. In
addition, the result on property sales was zero in the first half of 2008, compared with EUR 2.8 million in the first half of 2007.
Largely on the basis of this, the operating result of the Real Estate business area declined by EUR 35.5 million to EUR 44.4 million.
Excluding fair value gains on property, the operating result remained virtually the same at EUR 34.7 million.
Operating expenses increased by EUR 1.8 million to EUR 30.9 million. The main reasons for this are a higher staffing level, higher costs
of preparing the property for leasing and higher property tax assessments.
In the first half of 2008, capital expenditure by the Real Estate business area amounted to EUR 41.4 million and mainly concerned the
construction of a cargo building for Panalpina, the multi-tenant office building The Outlook (both at Amsterdam Airport Schiphol) and
various developments at the airport of Milan.
Alliances & Participations
The task of the Alliances & Participations business area is to roll out the AirportCity formula internationally. Alliances &
Participations consists of Schiphol Group's interests in the regional airports as well as its interests in airports abroad, other
investments and Utilities.
Sources of revenue: mainly airport and parking charges. The airports abroad contribute to group results through performance fees and
dividends as accounted for in share in results, through the interest they pay on loans and through Intellectual Property fees. The Utility
activities generate revenue from the transport of electricity and gas and from the supply of water to third parties. As a result of the
equity accounting method, changes in the fair value of the investments are not reflected in the results.
In the first half of 2008, the business area accounted for 7% of Schiphol Group's revenue and 4% of the operating result. By applying
the equity accounting method, changes in the market value of the investments are not reflected in the results.
Domestic airports
Of the increase in net revenue of EUR 4.1 million, EUR 2.2 million represents an increase in airport charges. This is partly the result
of a new contract between Eindhoven Airport and a handling agent, under which the revenue and costs concerned are presented separately. In
addition, passenger numbers at Eindhoven Airport rose by 9.4% to nearly 777,000, primarily due to an increase in the use of low-cost
airlines. Despite rising costs, mainly relating to the aforementioned contract, Eindhoven Airport achieved an increase of EUR 0.9 million in
its operating result compared with 2007, to EUR 1.9 million.
Rotterdam Airport saw its operating result decline by EUR 1.2 million to EUR 0.9 million, mainly because of a cost increase. The number
of passengers using Rotterdam Airport fell by 3.2% in the first half of 2008 (from 522,000 in 2007 to 505,000 in 2008). In May, Rotterdam
Airport was closed to all traffic for three days on account of a runway renovation project. In this period, the flights were re-routed to
Amsterdam Airport Schiphol.
In May, Minister Eurlings of Transport, Public Works and Water Management resumed the airport operations ruling procedure for the
expansion of Lelystad Airport. This procedure had been suspended in October 2007, following a decision of the Council of State regarding the
airport's existing licence. The new procedure is based on 9,000 air transport movements a year with aircraft carrying up to 180 passengers,
which is equivalent to 1 to 1.5 million passengers.
International airports
The international activities of the business area contributed a total of EUR 9.3 million in the form of interest income and dividends to
Schiphol Group's result before tax (first half of 2007: EUR 11.2 million). The decrease is attributable to a one-off tax benefit in
Australia in 2007. The biggest contribution was made by Brisbane Airport (EUR 8.0 million in 2008 compared to 10.1 million in 2007).
The number of passengers using Terminal 4 at JFK Airport, New York, rose by 13% to 4.6 million in the first six months of 2008. Brisbane
Airport welcomed 8.9 million passengers in the first half of 2008, which is 5% more than in the same period in 2007.
Other participations
The operating result of Utilities increased by EUR 1.8 million to EUR 3.2 million, and that of Schiphol Telematics by EUR 0.1 million to
EUR 2.4 million.
In May, the United States and the Netherlands signed a treaty intended to speed up passport control for travellers between Amsterdam
Airport Schiphol and America. In the Netherlands, the identity checks will be carried out by means of the Privium technology already in
place. This will create new opportunities for Schiphol Group's subsidiary Dartagnan to market this technology at an international level.
Other developments
"Alders Platform"
On 13 March 2008, a number of disturbance-reducing measures were introduced as an experiment. They result from two covenants that were
agreed within the context of the "Alders Platform", the consultation procedure between the local community and the aviation sector chaired
by Hans Alders, formerly the Queen's Commissioner in Groningen, about the future of Amsterdam Airport Schiphol. The covenants are part of an
agreement reached during these consultations in July 2007, which allows Amsterdam Airport Schiphol to grow to 480,000 air transport
movements a year until 2010.
On 2 April 2008, the Lower House approved a new Airport Traffic Ruling (LVB), drawn up in the second half of 2007 by the Ministers of
Transport, Public Works & Water Management and Housing, Spatial Planning & the Environment. It is based on a scenario of 480,000 air
transport movements.
By June 2008, the "Alders Platform" was to have issued advice to the government on the growth opportunities for Amsterdam Airport
Schiphol between 2010 and 2020. This deadline has not been met. The aim is now to issue the advice after the summer.
Reservation of parallel Runway 06-24
On 1 April 2008, the provincial authorities of Noord-Holland did not renew the spatial planning reservation for the possible
construction of a parallel Runway 06-24, arguing that the State offered insufficient prospects at that time for an implementation of the
reservation that would have favourable effects for the local community. Thereupon the Ministers of Transport, Public Works & Water
Management and Housing, Spatial Planning & the Environment declared that, where necessary, the State would intervene in order to prevent any
spatial planning from taking place in the near future that would preclude the construction of the runway. This was confirmed in a letter
from the Ministry of Transport, Public Works and Water Management of 24 July 2008. The reason for this is that the government has begun a
long-term survey of Schiphol's future from 2020. The parallel Runway 06-24 may play an important part in this. The long-term survey should
be completed by the end of 2009.
Super dividend
During the General Meeting of Shareholders of NV Luchthaven Schiphol (trading as Schiphol Group) on 17 April 2008, the shareholders
agreed to a proposal of the Board of Management to make an additional distribution from retained profits, consisting of:
* A super dividend (one-off distribution from retained profits) of EUR 500 million in 2008, to be distributed in the third quarter
of 2008;
* A second super dividend (one-off distribution from retained profits) of no more than EUR 500 million in 2009, under certain
conditions.
Credit rating
In view of the intended distribution of a super dividend, Standard & Poor's and Moody's Investor Service adjusted their credit rating
for NV Luchthaven Schiphol and Schiphol Nederland BV as at 18 April 2008 and 14 May 2008 respectively. Standard & Poor's reduced its rating
from AA- with a negative outlook to single A flat with a stable outlook while Moody's reduced its rating from Aa3 with a stable outlook to
A1 with a stable outlook.
Financing
In June 2008, Schiphol Group launched a Euro-Commercial Paper (ECP) programme with a limit of EUR 750 million. This programme is in
addition to the existing Euro Medium Term Note programme with a maximum of EUR 1 billion. To support the new programme, Schiphol Group has
structured a EUR 400 million syndicated and committed facility with a group of eight banks. In addition, Schiphol Group has two committed
credit facilities with ABN AMRO and ING. In July 2008 these two facilities were reduced to a total amount of EUR 100 million. As per June
2008, no loan under the new programme had yet been drawn.
On 4 August 2008, Schiphol Group raised a loan of JPY 20 billion with a term of 30 years. The JPY loan was immediately converted to EUR
120 million by means of a currency rate swap. The loan has a fixed interest coupon of 5.94% on a half-yearly basis (equivalent to 6.01% on
an annual basis).
Increase of interest in Airport Real Estate Basisfonds
On 1 July, Schiphol Group increased its interest in Airport Real Estate Basisfonds CV (ACRE Fund) from 50% to 60.25% by acquiring part
of the shares of ING Real Estate. The acquisition does not affect Schiphol Group's control over the CV.
Interim consolidated financial report
Consolidated profit and loss account for the first half of 2008
*) Restated for comparison purposes (see page 13)
Consolidated balance sheet as at 30 June 2008
Condensed consolidated statement of changes in shareholders' equity
Condensed consolidated cash flow statement for the first half of 2008
Notes to the interim consolidated financial report
General information
NV Luchthaven Schiphol is a public limited liability company 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. NV Luchthaven Schiphol trades under the
name of Schiphol Group.
Schiphol Group is an airport operator and, more particularly, an operator of AirportCities. It is our ambition to rank among the world's
leading airports. Our aim is to create sustainable value for our stakeholders by developing AirportCities and by positioning Amsterdam
Airport Schiphol as a leading, highly efficient air, rail and road transport hub offering its visitors and locally based businesses all the
services they require on a 24/7 basis.
Accounting policies
This interim consolidated financial report ('report') was 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
2007.
Full details of the accounting policies used in this report can be found in the 2007 financial statements of Schiphol Group. There has
been no change in the accounting policies in 2008.
The abovementioned policies are in accordance with IFRS and have been consistently applied to all the information presented in this
report except where otherwise indicated. During the first half of 2008, no new IFRS standards or interpretations were published which will
be mandatory for reporting on financial years ending 31 December 2008. Nor has Schiphol Group voluntarily applied any IFRS standards or
interpretations that do not come into force until a later date in this interim report.
Financial information is presented in thousands of euros except where otherwise stated.
Restatement of comparative figures for 2007
In the 2007 interim report, the revenue and costs (of EUR 1.2 million) were erroneously presented inclusive of excise duty. Both are now
presented exclusive of excise duty. This does not affect the result and the equity for the first half of 2007.
Information on seasonal effects
Operating airports is a seasonal business. The income and expenses included in this report for the first six months of 2008 relate to
approximately 49% (first six months of 2007: 48%) of the expected air transport movements for the full year and approximately 48% (first six
months of 2007: 47%) of the expected passenger movements for the full year.
Segment information
Revenue by business segment was as follows:
The operating result by business segment was as follows:
Other notes
1. Revenue
Revenue by activity and business area:
*) Restated for comparison purposes (see page 13)
2. Other results from property
The result from sales of property amounted to nil in 2008 (EUR 2.8 million in 2007). In 2008, fair value gains on property amounted to
EUR 9.9 million (EUR 45.3 million in 2007). Of these fair value gains 24,7% (70% in 2007) are related to the development, purchase and
renovation of property and 75,3% (30% in 2007) are related to fair value gains on the existing property portfolio.
3. Tax on profits
In the first half of 2008, the effective tax burden amounted to 25.1% (17.6% in 2007) at a standard tax rate of 25.5% (25.5% in 2007).
The difference in 2008 between the effective tax burden and the standard tax rate is the result of other tax rates and exemptions applicable
to associates abroad.
The larger positive difference in 2007 between the effective tax rate and the standard tax rate is the result of a non-recurring tax
credit of EUR 12.7 million from the provisional settlement of the 2004 tax return.
4. Retained profits
The net result (result attributable to shareholders) of EUR 95.8 million for 2008 (EUR 142.8 million for 2007) was added to the retained
profits.
Following the approval by the General Meeting of Shareholders on 17 April 2008 of the proposed profit appropriation presented in the
2007 financial statements, a dividend totalling EUR 93.0 million was distributed to the shareholders in 2008. This corresponds to a dividend
of EUR 543 per share.
During the same meeting, the shareholders approved a proposal of the Board of Management to make an additional distribution from the
retained profits, consisting of:
* A super dividend (one-off distribution at the expense of retained profits) of EUR 500 million in 2008, to be distributed in the
third quarter of 2008. This first instalment has been withdrawn from the equity and presented under current liabilities.
* A second super dividend (one-off distribution from retained profits) of no more than EUR 500 million in 2009, under certain
conditions. This second instalment has been classified as a contingent liability and has therefore not been withdrawn yet from the equity.
5. Other provisions
With regards to the Groenenberg site, no significant developments occurred during the first half of 2008 in comparison with the
situation described in the 2007 annual report.
6. Net cash flow, cash and cash equivalents
The net cash flow in 2008 amounted to EUR 23.5 million negative, compared to EUR 196.6 million negative in 2007. This caused a decrease
in the balance of cash and cash equivalents, from EUR 141.7 million as at 31 December 2007 to EUR 118.2 million as at 30 June 2008. The
reduced net outflow of cash and cash equivalents is primarily attributable to lower capital expenditure and financing expenses.
Capital expenditure totalled EUR 149.3 million in 2008, compared with EUR 171.8 million in 2007. Financing expenses amounted to EUR 106.1
million in 2008, compared with EUR 164.6 million in 2007. Among other things, the difference concerns lower repayments on loans, which were
compensated in part by lower amounts received on loans drawn.
Financing
In June 2008, Schiphol Group launched a Euro-Commercial Paper (ECP) programme with a limit of EUR 750 million. This programme is in
addition to the existing Euro Medium Term Note programme with a maximum of EUR 1 billion. To support the new programme, Schiphol Group has
structured an EUR 400 million syndicated and committed facility with a group of eight banks. In addition, Schiphol Group has two committed
credit facilities with ABN AMRO and ING. In July 2008 these two facilities were reduced to a total amount of EUR 100 million. As per June
2008, no loan under the new programme had yet been drawn.
Contingent assets and liabilities
The 2007 financial statements included a note on the contingent assets and liabilities as at 31 December 2007. No new contingent assets
and liabilities of a material nature have been identified during the first half of 2008, with the exception of the second instalment of the
super dividend discussed in section 4 above, nor have there been any important developments relating to the contingent assets and
liabilities existing as at 31 December 2007.
Events after balance sheet date
On 1 July 2008, Schiphol Group increased its interest in Airport Real Estate Basisfonds CV (ACRE Fund) from 50% to 60.25% by acquiring a
part of the shares of ING Real Estate. The acquisition does not affect Schiphol Group's control over the CV.
On 4 August 2008, Schiphol Group raised a loan of JPY 20 billion with a term of 30 years. The JPY loan was immediately converted to EUR
120 million by means of a currency rate swap. The loan has a fixed interest coupon of 5.94% on a half-yearly basis (equivalent to 6.01% on
an annual basis).
Schiphol, 20 August 2008
For the interim consolidated financial report for the first half of 2008
Supervisory Board
P.J. Kalff, Chairman
A. Ruys, Vice Chairman
H. van den Broek
Dr. F.J.G.M. Cremers
T.A. Maas-de Brouwer
W.F.C. Stevens
T.H. Woltman
Board of Management
Prof. G.J. Cerfontaine, President
M.M. de Groof, Member of the Board of Management/ Chief Commercial Officer
A.P.J.M. Rutten, Member of the Board of Management/Chief Operations Officer
Dr. P.M. Verboom, Member of the Board of Management/Chief Financial Officer
To the Shareholders, Supervisory Board and Board of Management of NV Luchthaven Schiphol
Review report
Introduction
We have reviewed the accompanying consolidated interim financial information for the six-month period ended 30 June 2008, of NV
Luchthaven Schiphol, Schiphol, as set out on pages 9 to 16. The interim financial information consists of the balance sheet as at 30 June
2008, the profit and loss account, the statement of changes in equity, the cash flow statement and the selected explanatory notes for the
six-month period then ended. The Board of Directors is responsible for the preparation and presentation of this consolidated interim
financial information in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. Our responsibility is to
express a conclusion on this interim financial information based on our review.
Scope
We conducted our review in accordance with Dutch law including standard 2410, 'Review of Interim Financial Information Performed by the
Auditor of the Entity'. 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 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 interim financial
information as at 30 June 2008 is not prepared, in all material respects, in accordance with IAS 34, 'Interim Financial Reporting', as
adopted by the European Union.
Amsterdam, 20 august 2008
PricewaterhouseCoopers Accountants NV
J.A.M. Stael RA
Partner
This information is provided by RNS
The company news service from the London Stock Exchange
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