Enav confirms a solid semester despite the Covid emergency. The air traffic control company closed the first six months of 2020 with a net profit of €15,6 million which compares with the €34,1 million of the first half of 2019 and revenues of €372,5 million (-10,7% ) despite the drop in traffic due to the Covid-19 emergency which hit the airlines very heavily, consequently affecting the company's accounts as well. Traffic en route in the first six months of 2020, it decreased by 58,4 while the terminal traffic decreased by 60%.
The half-year accounts were approved by the Board of Directors and present a consolidated EBITDA of 88 million euros (-23,5%) due to the contraction in revenues partially offset by cost efficiency (-5,9%). “The air transport sector is one of the most affected by the effects of the pandemic”, comments the managing director Paolo Simioni. “Unfortunately today it is not easy to make forecasts but it is certain that ENAV, due to its institutional and strategic role, represents a key factor for the recovery of the sector. The company has a solid capital structure and benefits from a regulatory system that mitigates the impacts deriving from traffic risk, even in the presence of the temporary derogation from the balance mechanism proposed by the European Commission for the years 2020 and 2021. Furthermore, thanks to the cost containment and the good performance of the unregulated market, we managed to safeguard our margins”.
However, the company has revised its earnings outlook for this year:
In recent weeks, there has been growing concern about the risks of a potential second wave of the spread of the Covid-19 virus, which has led a number of countries to adopt travel restriction measures (quarantines, partial lock-downs, etc. ), which could have a negative impact on air transport in the remaining part of the year and in the first months of 2021. This situation does not currently concern Italy, but a slowdown in air traffic in neighboring countries could have a negative effect on air traffic international and overflights. In the light of this uncertainty, ENAV withdraws its own outlook 2020, communicated in May, which forecasted a decrease in revenues mid single digit compared to 2019 and a decrease in net income high single digit compared to 2019. Instead, theoutlook on the value of capex at the end of the year to around 80 million euro.
Source: Enav press release
Going back to the past six months, i have tripled revenues from unregulated market which rose to €11,7 million compared to €4,1 million in the first half of 2019. The increase can mainly be attributed to the revenues generated by the subsidiary IDS AirNav, specialized in aeronautical information management systems, which entered the ENAV perimeter in July of last year. In fact, IDS has acquired several active contracts in European and non-European countries including France, Taiwan, Mozambique, Romania and Canada, during the lockdown phase.
What had a positive effect on the keeping of the accounts was the mechanism of Libra which, explains the ENAV note, had a positive impact of 191,4 million. The balance allows air traffic control operators to partially recover, with a rebalancing of the 2020 tariff, the lower revenues due to the fall in air traffic. In particular, the balance mechanism proposed by the EU Commission precisely to mitigate the impact of the pandemic, provides that the costs on the basis of which the tariff is defined are evaluated at the end of the two-year period 2020-21. The new one will be released after April next year.
Lastly, Enav benefited from a reduction in operating costs amounted to 284,5 million euros -5,9%), while the staff Price it fell 5,6% to 235,2 million.
