Nucor earnings beat by $0.08, revenue fell short of estimates
Investing.com -- Flughafen (VIE:VIEV) Zurich AG (SIX:FHZN) shares fell by 3% on Friday after the company posted a mixed set of full-year 2024 results.
While the Swiss airport operator announced a stronger-than-expected dividend payout policy, investor sentiment was dampened by a cautious outlook for 2025, which included flat EBITDA projections, higher capital expenditures, and a delay in the opening of the Noida International Airport in India.
A key highlight in the earnings report was Flughafen Zurich’s decision to implement a more generous dividend policy.
The company will now distribute 75% of earnings per share as dividends if its net debt remains below 2.5 times EBITDA. With leverage standing at 1.6x as of December 2024 and expectations of further de-leveraging in the medium term, analysts see this higher payout as sustainable in the foreseeable future.
The policy also represents an upside surprise compared to the 59% payout anticipated by the market.
With this move, Flughafen Zurich now ranks ahead of Groupe ADP, which offers a 60% payout, and is approaching the sector leader, AENA, which maintains an 80% payout ratio.
Despite this positive development, the company’s guidance for 2025 raised concerns. Passenger traffic is expected to grow between 2% and 3%, reaching around 32 million travelers—just shy of the consensus estimate of 32.3 million.
While revenue is projected to increase, Flughafen Zurich expects EBITDA to remain largely flat compared to 2024, falling short of analyst expectations, which had predicted a 4.6% rise.
The company also warned of higher operating expenses and disruptions from ongoing construction projects, which could weigh on commercial revenues.
Net income is projected to decline, largely due to increased depreciation and financial costs related to the Noida airport project.
The delay in Noida’s opening further complicated the outlook. Originally scheduled to begin operations in April 2025, the airport is now expected to open at the end of the second quarter.
It will initially focus on cargo services before gradually ramping up commercial operations over the next three to five months.
Analysts at BofA Securities had previously forecast that Noida would contribute CHF 10 million to EBITDA in 2025, but Flughafen Zurich now expects its impact to be largely neutral in its first year.
The slower-than-anticipated ramp-up has raised questions about the near-term financial benefits of the project.
Adding to investor concerns, Flughafen Zurich also revised its capital expenditure estimates higher. The company now expects to spend between CHF 300 million and CHF 350 million in Zurich, along with CHF 300 million internationally—primarily for the Noida project.
This brings total capex above the CHF 425 million forecasted by consensus, reinforcing worries about cash flow management in the near term.
The company’s FY24 results, however, were broadly in line with expectations. EBITDA for the year stood at CHF 733 million, slightly ahead of the company’s consensus of CHF 727 million.
Net profit came in at CHF 327 million, slightly below the market consensus of CHF 331 million. Free cash flow was CHF 71 million, and when adjusted for the acquisition of Natal Airport in Brazil, it would have been CHF 130 million. Net debt was reported at CHF 1.2 billion, lower than the CHF 1.28 billion consensus estimate.
Despite the weaker earnings outlook, Flughafen Zurich’s valuation remains relatively undemanding.
The stock currently trades at 10.2 times estimated 2025 EV/EBITDA, which analysts at BofA note is below its pre-pandemic average of 11 times.
Jefferies analysts value the stock at 20 times 2025 earnings and 10.5 times EBITDA, with a 3% dividend yield.