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Fraport Group Performing Well, Interim Report Reveals

by Philip Morton, Investors

15 November 2007

New figures released on Tuesday revealed that in the nine-month period from January to September 2007, all key indicators of airport services organisation, the Fraport Group improved again.

Despite Frankfurt Airport's capacity constraints, passenger figures at FRA climbed by 2.1% and airfreight by 1.7% compared to the previous year. Group revenue increased by 8.3%, and profit by some 9%. Accordingly, Fraport has raised its forecast for the entire year of 2007, as well as for traffic growth and operating results.

"We continue to see the Group developing very positively for the entire 2007 year," announced Fraport AG's executive board chairman Dr. Wilhelm Bender at the presentation of the company's nine-month financial results in Frankfurt earlier this week.

Because of the positive traffic development, Bender expects FRA's passenger figures to increase by about two percent compared to 2006 – despite the known capacity constraints and the strong positive effect of the World Cup last year. Bender indicated that revenue, mainly because of new investments, should grow compared to the previous year.

EBITDA (earnings before interest, tax, depreciation and amortization) is expected to be in the same range as in the 2006 record year, despite the higher positive special effects of last year.

In the first nine months of 2007 Group revenue climbed by 8.3% to nearly EUR1.8 billion. EBITDA – which declined by some five percent in the first half of the year due mainly to the previous year's special effects – still rose by 0.7% and hit EUR490 million by September.

The Group profit, influenced by positive tax effects, almost reached EUR219 million by September, an increase of 9.2% compared to the previous year. However, Bender pointed out that the company would not be able to repeat last year's record results – because the high special effects in the fourth quarter contributed over-proportionately to the full-year results of 2006.

As for the "urgently required expansion of FRA's capacities," Bender said that Fraport expected the zoning decision to be made during the coming weeks. The company has also achieved important successes regarding the diverse modernization and expansion projects underway at existing facilities. Today, Frankfurt Airport already boasts five A380-compatible aircraft docking positions with superjumbo gates.

In the next few weeks, preparations will begin for the construction of the Pier A0 at FRA's Terminal 1. With a length of 790 meters and a total area of 160,000 square meters, Pier A0 will provide capacity for another six million passengers per year at the beginning of the 2011 Winter Timetable. The new pier will provide additional terminal docking positions, capable of handling either seven widebody aircraft or eleven short-haul jets.

Bender also underscored the importance of Fraport AG's global investment portfolio. The Fraport-led consortium's renewed concession for terminal operations at Antalya Airport (AYT) in the Turkish Riviera has been in effect since the middle of September. Starting in September 2009, the Fraport consortium will also take over operations of the second international passenger terminal at AYT, which has been operated until now by a competitor.

In Peru, Fraport now owns 100 percent of Lima Airport. Fraport is currently in discussions with Peruvian investors to sell a portion of its stake, whereby Fraport would keep at least 60 percent of its shares.

Regarding the company's investment in Xi'an Airport in central China Bender announced that:

"We hope to receive final approval from the Chinese authorities soon."

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