Swissport posts solid 2019, slashes costs in 2020 including staff

Swissport Cargo Handling
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Swissport achieved an operating EBITDA of EUR 272.3 million in 2019, roughly on par with the previous year result of EUR 273.2 million. The group’s revenue from operating activities increased to EUR 3.13 billion up 4.7 per cent from 2018.

Swissport’s turnover was 4.7 per cent up year-on-year despite a volume decline (2.3 per cent up at constant currency). The airport ground services business contributed EUR 2.54 billion, up 4.5 per cent while air cargo handling posted a revenue of EUR 0.59 billion, up 5.0 per cent.

The handler says the startups in the Middle East are steadily adding clients to their customer portfolio and were – prior to the coronavirus crisis – on track to operational break-even three years after the market entry.

In Brussels (BRU), the company opened a state-of-the-art Swissport Pharma Center. Melbourne (MEL) is scheduled to become the first Swissport cargo operation in Australia, delivering on the ambition to build on the former Aerocare organisation and its strong market position as a platform for growth in the dynamic Asia-Pacific region.

“2019 was a solid year for Swissport,” says Eric Born, group president & CEO of Swissport International. “The 4.7 per cent year-on-year revenue growth, our stable operating result and a positive free cash flow were driven by our operating performance, the first full-year consolidation of our businesses in Australia and New Zealand and by our effective working capital management. Favourable foreign exchange effects also contributed to a solid performance.

“However, a weakening global economy started to impact our results in spring 2019 and our EBITDA-margin slipped by nearly half a percentage point year-on-year prompting swift cost measures,” Born adds.

Swissport has started 2020 with a strong liquidity of over EUR 300 million. Due to the unprecedented global market collapse triggered by the coronavirus pandemic, the company expects an 80 per cent drop in revenue for April and May.

Despite what it says were fast and drastic measures to quickly reduce the cost base, including an investment stop and a variety of measures to reduce its payroll, Swissport will require additional liquidity in early summer. The company currently has 40,000 employees on furlough or other state-supported programs like short-time work while some 10,000 employees had to be made redundant, leaving under 15,000 of formerly 64,000 staff on active duty.

“We are exploring all avenues to secure additional liquidity,” explains Born. “Federal aid is an important pillar. In parallel we are working on additional financing with our lenders and investors. We are confident that we will be able to raise the necessary liquidity on the capital market within the available time frame and that we will also meet the conditions set by the Swiss government to qualify for state support.”

In airport ground services, Swissport performed 2.1 million aircraft turns in 2019 (2018: 2.2 million). The group served 265 million passengers on behalf of its airline clients (2018: 282 million). Air cargo tonnes handled stood at 4.6 million (2018: 4.8 million) at 115 cargo warehouses around the world. Several of its warehouses have been certified for pharmaceutical logistics by IATA’s CEIV.

At the end of December 2019, Swissport was operating at 300 airports in 47 countries on six continents.

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