|(in thousands of Euro)||2016||%||2015||%||Cge. % |
|Revenues for works on assets under concession||46,622||6.7%||52,384||7.5%||-11.0%|
|Misc. operating costs||(239,646)||-34.2%||(245,956)||-35.4%||-2.6%|
|Total operating costs||(422,617)||-60.4%||(422,935)||-60.9%||-0.1%|
|Costs for works on assets und. concession||(43,114)||-6.2%||(48,781)||-7.0%||-11.6%|
|Gross Operating Margin / EBITDA (1)||234,403||33.5%||223,076||32.1%||5.1%|
|Provisions and write-downs||(5,497)||-0.8%||(3,245)||-0.5%||69.4%|
|Restoration & replacement provision||(17,193)||-2.5%||(14,242)||-2.0%||20.7%|
|Amortisation and Depreciation||(61,714)||-8.8%||(59,524)||-8.6%||3,7%|
|Investment income (charges)||9,842||1.4%||7,723||1.1%||27.4%|
|Continuing operations profit||93,774||13.4%||80,553||11.6%||16.4%|
|Discontinued operations profit/(Loss)||(130)||n.s.||3,238||ns.||-104.0%|
|Minority interest profit||25||n.s.||(59)||ns.||-142.4%|
(1) EBITDA is calculated as the difference between total revenues and total costs, excluding provisions and write-downs. EBITDA in the comparative period, which also included provisions and write-downs with the exception of the restoration and replacement provision was therefore restated according to the new approach in order to ensure data comparability as shown in the Explanatory notes paragraph 2.1 “Basis of preparation”.
The accounting standards used to prepare the 2016 consolidated financial statements are in line with those used to prepare the consolidated financial statements as at December 31, 2015. The scope of consolidation as at December 31, 2016 was different to at December 31, 2015, due to the sale on April 1, 2016 of 60% of SEA Prime SpA’s equity interest in Signature Flight Support Italy Srl (formerly Prime AviationServices SpA) and of the refuelling business. Due to the loss of control, the interest in Signature Flight Support Italy Srl is now classified among associates instead of subsidiaries and is recognised using the equity method rather than consolidated on a full line-by-line basis.
Comments are provided below on the main captions of the income statement.
In FY 2016, operating revenues (revenues net of the component for works on assets under concession), amount to Euro 653,512 thousand including Aviation operating revenues of Euro 408,970 thousand (Euro 395,877 thousand in 2015), Non Aviation operating revenues of Euro 216,900 thousand (Euro 214,864 thousand in 2015), General Aviation business revenues of Euro 11,750 thousand (Euro 16,179 thousand in 2015), and the Energy business revenues of Euro 15,892 thousand (Euro 15,488 thousand in 2015).
Operating revenues increased by Euro 11,104 compared to the previous year (+1.7%), which had benefited from Euro 4,010 thousand non-recurring revenues (Euro 1,810 thousand in Aviation business referred to a transaction with a supplier and Euro 2,200 thousand in the Non Aviation business referred to enforcement of a guarantee. Net of these components and deducting the revenue of Signature Flight Support Italy (previously Prime AviationServices SpA) and the refuelling business (included for 12 months in 2015 and 3 months in 2016), revenues were up Euro 20,830 thousand (+3.3%). This performance was mainly driven by:
- the Aviation activity for Euro 14,903 thousand, net of non-recurring revenues of 2015, due to the effect of higher traffic volumes reported in both the passenger and cargo segments, which benefited from the additional capacity offered by airlines favoured by a steady fuel price during all of 2016 and availability of new fleets;
- Non Aviation activity for Euro 4,236 thousand, net of non-recurring revenues of 2015, which recorded increased results in the shops, food & beverage and car rental areas. The parking business also saw a significant increase in revenue, thanks to the return to full operation of the carparks closed in 2015 due to work on the train station. Advertising revenues dropped, compared with the higher income of 2015, favourably affected by the EXPO event;
- Energy business for Euro 404 thousand. A decrease in electricity sales revenues was reported in the period due to the increase in revenue for Green Certificates and White Certificates accrued in 2016 and a slight increase in revenue from the sale of thermal energy.
- General Aviation business with the same scope of Euro 1,287 thousand, then deducting the revenues of the company Signature Flight Support Italy Srl (previously Prime AviationServices SpA) and the refuelling business (12 months in 2015 and 3 months in 2016). Without considering the change in scope, revenues would decrease to Euro 4,429 thousand due to the effect of deconsolidation of the aforesaid businesses.
Revenues for works on assets under concession decreased from Euro 52,384 thousand in 2015 to Euro 46,622 thousand in 2016 with a drop of 11%. These revenues refer to construction work on assets under concession increased by a mark-up representing the best estimate of the remuneration of the internal cost for the management of the works and design activities undertaken, which corresponds to a mark-up which a third-party general constructor would request to undertake such activities. This account is strictly related to investment activities on assets under concession.
Operating costs for the year 2016 were Euro 422,617 thousand, in line with the previous year (-0.1%). Net of the non-recurring cost components, that regard incentives for leaving, Antitrust fine (2015) and the closing of litigation regarding State Aid (2016) and deducting the costs of the company Prime AviationServices and refuelling activity (12 months in 2015 and 3 months in 2016), the costs increased by Euro 4,056 thousand (+1.0).
This increase is mainly the result of:
- The Group's personnel costs, which increased by Euro 4,919 thousand (+2.8%) compared to 2015, rising from Euro 173,672 thousand in 2015 to Euro 178,592 thousand in 2016. The increase was primarily due to the adjustment to the National Labour Collective Contract signed in 2014, whose wage increase was divided into various tranches and the increase in personnel due to the expansion of the scope of the company's security business.
- The average Full-Time Equivalent workforce was 2,801 in 2016 against 2,783 in 2015.
- Other operating costs decreased by Euro 863 thousand, the result of an increase of costs connected to traffic volumes for Euro 6,585 thousand (public bodies, commercial costs and carpark management fees), as well as the reduction of other operating costs for Euro 7,448 thousand (professional services, insurance costs, costs related to management of snow events and energy consumption).
Costs for works on assets under concession
Costs for works on assets under concession decreased from Euro 48,781 thousand in 2015 to Euro 43,114 thousand in 2016. These costs refer to the costs for the works undertaken on assets under concession. The changes in this item are strictly related to investment activities.
Due to the above dynamics, EBITDA amounted to Euro 234,403 thousand compared to Euro 223,076 thousand at December 31, 2015, up 5.1% (Euro +11,327 thousand). Net of non-recurring items and on a like-for-like basis, EBITDA was up 7.4% (Euro 16,615 thousand).
Provisions & write-downs
In 2016, provisions and write-downs increased by Euro 2,252 thousand, rising from Euro 3,245 thousand in 2015 to Euro 5,497 thousand.
This increase is mainly the result of:
- lower net provisions to the future charges provision for Euro 3,815 thousand (net provisions in 2016 total Euro 1,035 thousand while in 2015 they stood at Euro 4,850 thousand). This change is primarily due to lower tax related provisions (Euro 5,188 thousand) from net releases during 2016, lower labour related provisions and insurance excesses (totalling Euro 2,848 thousand), partly offset by the provision in 2016 of Euro 1,049 thousand related to the litigation with GSE, which disputed the procedure for determining the green certificated of SEA Energia for the 2010-2014 period, and lower net provisions for Euro 2,771 thousand related to various lawsuits (in 2015 a Court of Appeals verdict was handed down related to litigation with an airline for which an adjustment had been made to the provision);
- higher net provisions to the doubtful debt provision (trade and other receivables) for Euro 8,075 thousand (net provisions for trade receivables in 2016 total Euro 2,743 thousand while net releases in 2015 stood at Euro 5,456 thousand); net provisions of other receivables total in 2016 Euro 1,636 thousand versus Euro 1,760 thousand in 2015). In terms of trade receivables, releases in 2015 were related to the complete compliance with a repayment plan established with an airline therefore it was no longer necessary to maintain the previously allocated provisions;
- lower provisions for impairment of assets for Euro 2,008 thousand (Euro 84 thousand in 2016 and Euro 2,091 thousand in 2015). Last year was affected by impairment following a physical inventory of assets completed in the month of December.
For further information, reference should be made to note 7.6 of the consolidated financial statements.
Restoration & replacement provision
An increase of Euro 2,951 thousand was reported for 2016. The provision rose from Euro 14,242 thousand in 2015 to Euro 17,193 thousand in 2016, the result of updating of the long-term scheduled replacement and maintenance plan for assets that are part of the so-called ”Concession Right".
Investment income and charges
Net income from investments increased by Euro 2,119 thousand in 2016, rising from Euro 7,723 thousand in 2015 to Euro 9,842 thousand in 2016 and include investments measured with the equity method and other income and charges.
The “equity valuation of investments” reflects the economic effects deriving from the measurement of the associated companies at equity, amounting to Euro 6,986 thousand in 2016 (Euro 7,723 thousand in 2015). The results of the associated companies were adjusted to take account of the Group accounting principles and the measurement of investments as per IAS 28. The decrease between the two years, totalling Euro 737 thousand, is mainly due to the slight worsening of the results achieved by some of the associated companies only partly offset by the results of the associated companies with increased results.
The other income, up Euro 2,856 thousand, include non-recurring items of 2016, related to the capital gain of SEA Prime for the sale of 60% of the investment in Signature Flight Support Italy Srl (previously Prime AviationServices SpA), totalling Euro 955 thousand and dividends for Euro 1,901 thousand, approved by the Shareholders' Meeting of Airport Handling SpA of May 6, 2016 on the allocation of profit for the year 2015, related to the Financial Instruments of Participation held by SEA.
Financial income and charges
In 2016, net financial charges decreased Euro 267 thousand, from Euro 19,070 thousand at December 31, 2015 to Euro 18,803 thousand at December 31, 2016.
Gross financial charges decreased by Euro 989 thousand, this reduction was mainly due to the following contrasting factors: i) lower interest expense for the period on medium-long term loans for Euro 932 thousand due to the decrease of gross debt and reduction of the average cost of debt; ii) lower fees on loans for Euro 818 thousand; iii) higher other interest expense for Euro 782 thousand, affected by the higher bank guarantees connected to distribution of the EIB loans in June 2015.
In the same period financial income decreased by Euro 723 thousand following the decrease in market rates and changes in cash flow occurring during the year.
Income taxes for the year 2016 total Euro 47,263 thousand versus Euro 54,165 thousand reported in 2015. The year 2015 was negatively affected at Group level due to the effects generated from realignment of deferred tax assets and liabilities to the new IRES rate of 24%, applicable starting with the 2017 tax period, and the non-deductible nature of some extraordinary items.
Reference should be made to note 7.12 of the consolidated financial statements for a detailed analysis of the profit and loss components which contributed to this result and comparison with 2015 figures.
Discontinued operations profit/(loss)
The discontinued operations net result, concerning the commercial aviation handling sector, reports a net loss totalling Euro 130 thousand compared to a net profit of Euro 3,238 thousand the previous year.
The item includes the result of the company SEA Handling SpA in liquidation, for which liquidation activities continued during 2016. The 2015 result had benefited from the rental and later sale of vehicles to the Airport Handling company.
Reference should be made to notes 5.2 and 7.13 of the consolidated financial statements for a detailed analysis of the items which contributed to this net result and comparison with 2015 in application of IFRS 5.
As a result of the changes discussed above, the Group Net Profit for the year increased by Euro 9,769 thousand - from Euro 83,850 thousand in 2015 to Euro 93,619 thousand in 2016.