The Enav Board of Directors approved the interim management report as at 31 March 2018. The first quarter of 2018 recorded a good performance in terms of growth in air traffic and therefore in revenues from operating activities, despite the typical seasonality of the sector which in this period of the year marks the lowest levels of traffic, against a linear cost trend throughout the year.
En route traffic expressed in service units (a conventional weighted measure which takes into account the weight of the aircraft at take off and, in the case of en route traffic, also the distance flown by it) is up by 7,6% compared to the same period of 2017. The growth of en-route traffic over Italian skies concerned both national and international traffic but above all overflights, which show an increase of 11,7% in terms of service units; this performance can also be attributed to the implementation of the Free Route procedure which allows all aircraft above 11.000 meters to cross national airspace with a direct route which allows airlines to plan the shortest trajectories without constraints, thus saving fuel, running costs and reducing CO2 emissions.
The good en route traffic performance, despite the persistent partial closure of the Libyan airspace, is also attributable to the increase in medium and long-haul air flows from countries neighboring Italy such as Turkey, Greece, Egypt and Tunisia and to the increase of the average distance flown within the Italian airspace. Terminal traffic (which concerns take-off and landing activities within a radius of 20 km from the runway) recorded an increase of 5,2% in terms of service units. The growth involved most of the airports throughout the country. Also for the terminal part, the international traffic component was the driving force with a 6,3% increase in service units.
FINANCIAL ECONOMIC PERFORMANCE
Total consolidated revenues in the first quarter of 2018 amounted to 175,5 million euros, slightly down by 0,5% compared to the same period of 2017 due to the combined effect of growing revenues from operating activities (+5,9 %) and negative balance. Revenues from operating activities, equal to 170,9 million euros, grew by 5,9%, driven by the increase in revenues from the route (+8,1% to 120,5 million euros) and from the terminal (+ 1,7% to 44,2 million euros). Assets on the non-regulated market are in line with 2017 and amount to €3,1 million.
The balance, (the mechanism which envisages for ENAV the recovery or restitution to the carriers of the effects deriving from the difference between the air traffic envisaged in the tariff plan and the actual one as well as the recovery of costs and traffic for the services provided at third party airports band - less than 70.000 movements per year) had a negative impact on revenues in the first quarter of 2018 with a negative amount of 4 million euros compared to a positive balance of 6,3 million euros recorded in the first quarter of 2017, due to a lower balance en-route, as a consequence of the strong growth in traffic, and of a greater use of the balance recorded in previous years reversed in the 2018 tariff.
In the first quarter of 2018, the ENAV Group continued along its efficiency path with interventions on various expense items and process optimization between Group companies. Operating costs amounted to 145,5 million euros, down by 1,5% compared to the first quarter of 2017. Personnel costs are substantially in line with 2017 (-0,1%). External costs amounted to 34,4 million euros and decreased by 4,9% compared to the first quarter of 2017 mainly due to the reduction in costs for utilities and telecommunications, for the rental of office buildings and for lower external services , thanks to a process of insourcing and increasing the productivity of the Group's resources.
The consolidated Gross Operating Margin (EBITDA) in the first quarter of 2018 grew by 4,3% compared to the same period of the previous year, reaching 30 million euros with an EBITDA margin of 17,1% (16,3% in the first quarter of 2017 ). The consolidated Operating Result (EBIT) recorded a value of -1,7 million euro, an improvement of 1,2 million euro compared to the first quarter of 2017. The ENAV Group closed the first quarter of 2018 with a net loss of 4,4, 2017 million euros, substantially in line with the result of the first quarter of 4,2 (-2017 million euros) as a result of the financial management which in the first quarter of XNUMX
it included the positive accounting effect of 1,1 million euros deriving from the discounting of balance receivables.
It should be emphasized that the first quarter was affected by a negative effect typical of the seasonality of air traffic, against a linearity of costs. Net financial debt in the first quarter of 2018 stood at 83,3 million euros, an improvement of 34,2 million euros compared to the figure as at 31 December 2017, thanks to the positive cash flow from ordinary operations.
2018 guidance confirmed
For the 2018 financial year, the Company confirms the guidance provided to the market last March, which forecasts stable net revenues or low single-digit growth due to the reduction in the regulated rate in a context of traffic growth, and EBITDA margin in line with 2017, around 32%. Investments in 2018 will undergo an acceleration linked to the launch of the main initiatives of the 2018-2022 business plan and will be in the order of 125 million euros, compared to 115 million euros in 2017. The Company also confirms the guidance on the dividend for the 2018 financial year, expected to grow by 4% compared to that relating to the 2017 financial year approved by the Shareholders' Meeting on 27 April 2018, in line with the dividend policy approved and communicated to the market.
