Lithuanian Airports Count Losses, But Look to the Future with Optimism
The 4.67 million euros in net losses due to the coronavirus crisis in the first half of this year by Lithuanian Airports were surprisingly lower than planned, but a net loss of 1.96 million euros was recorded from January to June 2020. The state-owned company manages the Vilnius, Kaunas and Palanga airports. Considering the company’s results for these periods, it must be noted that during the first months of 2020, before the pandemic struck, aviation flows were as per usual, leading to better comparative results.
With air transportation limited due to the coronavirus, the company’s income in the first half of this year reached 9.07 million euros, which is 22 percent less than in the first half of 2020. Respectively, aviation operation income fell by 23 percent, down to 5.56 million euros, and non-aviation operation income was down by 20 percent at 3.503 million euros. Lithuanian Airports earnings before interest, taxes, depreciation and amortization (EBITDA) were negative over the first half of this year with a loss of 0.62 million euros, while during the same period last year, the EBITDA was positive at 1.319 million euros.
According to Lithuanian Airports Department of Finance and Administration head Laura Joffė, the aviation industry around the world was and continues to be forced to work under difficult conditions due to pandemic-related reasons, which naturally result in finance management challenges.
“The pandemic persisted this spring, and so we were unable to reach the planned passenger volumes in the first half of the year, but despite this, Lithuanian Airports was able to achieve the planned financial results for the half-year. Therefore, we hope to conclude the year in line with the established financial plan,” Joffė says.
And while it is difficult to predict the results for the second half of the year, positive signs of market recovery have been observed.
“The three Lithuanian airports served 332 thousand passengers in the second quarter of this year, which is twice the number of the first quarter –- if the trend of travel demand recovery remains positive and the pandemic remains contained, the aviation sector should continue rapidly recovering,” Joffė explains.
In terms of dividends for the year 2020, she points out that in realizing the company’s difficult financial situation and acting based on the principle of a private investor, the shareholder is looking for opportunities to exempt the company from paying profit tax during this challenging period.
Another important aspect is that Lithuanian Airports was able to ensure financing for all its most important infrastructural projects, and one of the most important among them was the reconstruction of Palanga Airport, which is to be performed by the Latvian company A.C.B.
The contractor committed to performing all the work for 13.6 million euros (without V.A.T.) within 45 days. Palanga Airport will close in early September for general reconstruction, which will last a month and a half. Take-off, landing and taxiing runways, as well as some of the key engineering infrastructure, will be renovated, and the premises of the passenger terminal refurbished.
