(Reuters) – French airport operator ADP said on Thursday that it expects profit to return to pre-pandemic levels a year earlier than anticipated, but its outlook for Paris passenger traffic disappointed, sending its shares sharply lower.
The operator of airports in France, central Asia, India and elsewhere, posted annual earnings that beat expectations as traffic recovered and it saw stronger activity in its retail and services business.
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at 1.70 billion euros ($1.82 billion), against an estimate of 1.63 billion euros in a company-provided poll.
Despite the market-beating results, investors were disappointed by the company’s outlook.
Analysts at JPMorgan said guidance was “underwhelming”, citing updated traffic expectations for Paris of between 87% and 93% of 2019 levels, compared to a previous forecast that pegged the figures at 85% to 95%.Â
Shares traded down 5.35% at 1221 GMT.
At a results presentation, ADP Chairman and Chief Executive Officer Augustin de Romanet, said pent up demand will likely continue to offset rising inflation in the near term, while the key Chinese travel market will progressively return.
He sees weekly flights from China likely increasing to around 28 in June from 6 currently.
“I hope it will be more,” de Romanet said, noting that negotiations between French and Chinese authorities were ongoing, but that the return to pre-COVID-19 levels was not “super simple”.
Before the pandemic, the company, which operates Charles de Gaulle and Orly airports, counted around a hundred flights between France and China each week, and currently has the capacity to handle 70 a week.
The company is expected to be one of the main beneficiaries of the China reopening, likely providing positive momentum in the short-term, according to analysts at Stifel, who note that Paris remains “one of Europe’s healthiest air travel markets.”
ADP said it expected its EBITDA to return to at least pre-pandemic 2019 levels as early as this year, meaning at least 1.77 billion euros, a year earlier than its previous forecasts.
The company said it expected overall 2023 passenger numbers for the group to climb to the range of 95% and 105% of pre-pandemic levels.
($1 = 0.9346 euros)
(Reporting by Agata Rybska and Agnieszka Gosciak in Gdansk and Mimosa Spencer in Paris; Editing by Milla Nissi and Sharon Singleton)
