Fraport Stock: Cautious Outlook Disappoints Investors

Frankfurt Airport operator Fraport has seen its stock price decline following the release of its conservative outlook for 2025. Shares fell by more than three percent in early trading, making it one of the biggest losers in the MDAX index. The negative market reaction stems from the slow recovery in passenger numbers at Frankfurt Airport, where the company expects only a modest increase from 61.6 million to a maximum of 64 million travelers in 2025 - still well below the pre-pandemic record of over 70 million passengers in 2019. Despite reporting revenue growth of 10.7 percent to 4.43 billion euros in 2024 and an 8.1 percent increase in operating profit to 1.30 billion euros, investors remain concerned about the cautious projections for operational growth, which fall short of analyst expectations. Additionally, shareholders will receive no dividends for either 2024 or 2025 as the company prioritizes debt reduction and ongoing investments.

International Operations Show Stronger Performance

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While Frankfurt Airport continues to underperform expectations, Fraport's international operations have developed much more positively. The company recorded significant growth at its foreign locations, with many exceeding pre-pandemic passenger levels. Notable increases were seen in Lima (15.2 percent), Ljubljana (13.3 percent), Turkey's Antalya (6.5 percent), and across 14 Greek airports (6.4 percent). However, these international successes are overshadowed by the company's high net debt of nearly 8.4 billion euros - an increase of about nine percent compared to the previous year. This debt burden, primarily resulting from investments in Frankfurt's new Terminal 3 and Lima airport expansion, continues to constrain the company's financial flexibility and contributes to the stock's approximately five percent decline since the beginning of the year.