2D·

Fraport purchase

New addition Fraport: $FRA (+2.95%)

Fraport AG (ISIN: DE0005773303, MDAX) is one of the world's leading airport operators and operates Frankfurt Airport as its core business as well as investments in 29 other international airports.

Fraport does not provide any physical products, but rather infrastructure and services related to airport operations.

Aviation: Operation of landside and airside infrastructure in Frankfurt (take-off/landing fees, terminal use)

Retail & Real Estate: Retail, gastronomy and real estate development at the Frankfurt site

Ground Handling: Ground handling services such as baggage, loading and passenger services as well as cargo handling

International Activities: Operation and management of airports worldwide - these already contribute more than half of the Group's profit.

Monopoly position: Airports are regulated infrastructure monopolies - airlines in the catchment area have no alternative

Concession agreements: E.g. in 2014, Fraport secured the right to operate 14 Greek regional airports for 40 years (73.4% share)

High barriers to entry: Building new airports requires decades of planning, approvals and billions in investment

Recurring revenues: Passenger fees, parking fees, rents and concessions ensure stable cash flows

Government backing: Major shareholders, the State of Hesse and the City of Frankfurt, stabilize the company and ensure planning security.

Fraport has set a conservative dividend after resumption in 2024

The planned increase to ~€3 by 2028/2030 signals confidence in earnings growth - the current yield of 1.4-1.5% is still not very attractive for income investors, but the growth momentum is convincing .

29.04

Fraport Airport

Bought x72 at €69.50

€5,004.00

6 Comments

CaYaRo@CaYaRo

Since the vacation in Greece (and the on-site assessment of the FRAPORT service in GR) in summer 2024 in the portfolio.
Resumption of dividend unfortunately only from 2026 for FY 2025 with initially € 1 per share.

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Smudo@Smudeo

@CaYaRo When Fraport finally started to take off in 2016, the crises came: Lawsuits, CoVid, Ukraine etc.
I hope they get through the crises quickly and stronger.
Dividend is secondary for me here, see share price potential

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CaYaRo@CaYaRo

I can also recommend the Abilitato article that I came across during my research:
https://abilitato.de/fraport-aktie-historisch-guenstige-bewertung-kgv-von-10-fuer-ein-geschaeft-mit-monopolstellung/

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Smudo@Smudeo

@CaYaRo The report from 2024.
Current:
Not only are higher passenger numbers ensuring a slight increase in revenue, but EBITDA is also likely to rise noticeably. Price adjustments, a more robust international business and initial effects from cost reductions are supporting the development.

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CaYaRo@CaYaRo

@Smudeo At the time, as described well in the article, I was interested in stocks with moats (such as airports owned by federal states) for partial portfolio hedging. I am relaxed about the future with this stock.

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Smudo@Smudeo

@CaYaRo T3 boosts value creation in the medium term
Overall, the new Terminal 3 is likely to dominate the picture throughout Q1 this year. Although commissioning will initially have a negative impact on the income statement due to the depreciation that is now due, it will increase the earnings base in the medium term. More modern areas, a higher proportion of retail and more efficient processes will increase the value added per passenger. This effect will become apparent as capacity utilization increases.

At the same time, Fraport should reach the turning point in cash flow that we have outlined. After years of high capital expenditure, the capex peak has been passed and a clearly positive free cash flow is expected for 2026, which should be particularly evident from Q2 onwards. Debt is falling, financial leeway is growing. The debt ratio should fall below 6 times EBITDA in 2026 and below 5 times by 2028.

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