Aerodrom Ljubljana, d.d.

Transcription

1 Aerodrom Ljubljana, d. d. Zg. Brnik 130a 4210 Brnik-aerodrom Aerodrom Ljubljana, d.d. UNAUDITED HALF-YEARLY BUSINESS REPORT FOR 2011 Zg. Brnik, August 2011

2 CONTENTS 1 Introduction Performance in figures Significant events Presentation of the company Management Board and Supervisory Board Seasonal nature of operations Business report Traffic Operating results Investments in buildings and equipment Employees Risk management Ownership structure and AELG share Financial report Unaudited financial statements Notes to the financial statements Other explanatory notes Segment reporting Declaration by the Management Board

3 1 INTRODUCTION Following a discussion by the Supervisory Board on 24 August 2011, Aerodrom Ljubljana, d.d., will, on the basis of the provisions of the Rules of the Ljubljana Stock Exchange and in accordance to the valid legislation, publish the company's unaudited half-yearly business report for The report will be accessible on the company's website at on the Ljubljana Stock Exchange's SEOnet electronic information system and in the central storage system for regulated information (Info Storage). Any significant changes in the information contained in the listing prospectus are regularly published by the company on the Ljubljana Stock Exchange's electronic information system SEOnet. Aerodrom Ljubljana, d.d.'s unaudited financial statements for the first half of 2011 are compiled in accordance with International Financial Reporting Standards (IFRS) and clarifications approved by the International Accounting Standards Board (IASB) and take into account the same accounting policies as the audited financial statements for The company does not have authorised capital or a conditional increase of share capital. The company did not pay dividends during the first half of The company does not hold any treasury shares. 1.1 PERFORMANCE IN FIGURES R1-6/11 R1-6/10 Index R11/R10 Number of passengers 607, , Aircraft movements 19,772 19, Cargo (in tonnes) 10,207 7, Operating revenues - in thousand euros 15,467 14, Net sales revenue - in thousand euros 15,378 14, Operating expenses - in thousand euros 13,360 13, EBITDA - operating profit before interest, taxes and depreciation / amortization - in thousand euros 5,699 4, EBIT - operating profit - in thousand euros 2,107 1, Net finance income / costs - in thousand euros Profit (or loss) before tax - in thousand euros 2,890 1, Net profit (or loss) - in thousand euros 2,299 1, Total comprehensive income for the period - in thousand euros 2,026 1, Value added - in thousand euros (gross return on operations - costs of materials and services - other operating expenses) 11,499 10, Assets on 30 June 2011 / 31 December in thousand euros 131, , Capital and reserves on 30 June 2011 / 31 December in thousand euros 121, , Investments in buildings and equipment - in thousand euros 1,630 4, No. of employees on 30 June The average number of employees on the basis of hours worked* Value added per employee - in euros (value added / the average number of employees on the basis of hours worked) 28,787 27, Diluted earnings per share - in euros (net profit (or loss) / average number of all shares) Total comprehensive income per share - in euros (total comprehensive income for the period / total number of shares issued) Closing share price on 30 June - in euros Book value of shares on 30 June - in euros (capital and reserves / total number of shares issued) Closing share price to book value of shares (P / B) *The number of permanent employees as at 30 June 2011 was higher, because in 2010 we mostly worked with employment agencies, as explained in point

4 1.2 SIGNIFICANT EVENTS Significant events in the first half of 2011: At the proposal of the Management Board and with the approval of the Supervisory Board, Aerodrom Ljubljana, d.d. increased its holding in Adria Airways Tehnika d.d. in February 2011, as EUR 2.4 million of receivables from Adria Airways d.d. was converted into an increase in equity. This additional acquisition took Aerodrom Ljubljana s holding in Adria Airways Tehnika d.d. to 47.67%, and gave it the same rights on the board of directors as the owner of the company s remaining shares. At the same time a call option was established in favour of Adria Airways d.d., under which it has the right to repurchase from Aerodrom Ljubljana, d.d. all or some of the preference and ordinary shares in Adria Airways Tehnika d.d. at a price determined in the amount of the corresponding value of the share capital of Adria Airways d.d. as at the day that the buyout agreement is concluded, plus an 8% annual return for the period between the day of acquisition and the day that the call option is exercised, minus the dividends paid out in the same period. On 11 March Aerodrom Ljubljana, d.d. Management Board member Bernarda Trebušak was appointed to the board of directors of Adria Airways Tehnika d.d. In the summer timetable, which began on 27 March, Finnish airline Finnair restarted its route to the Finnish capital Helsinki, flying four times a week, Jat Airways having ceased all flights from Ljubljana in February. A memorandum of understanding with Indian airline Air India was signed on 14 June. The document forms the basis for further agreements on cooperation between Air India, Adria Airways d.d. and Aerodrom Ljubljana d.d. At the Annual General Meeting held on 23 June, the shareholders decided on the use of the distributable profit for 2010, conferred official approval on the Management Board and Supervisory Board for their work in the previous year, appointed an auditor for the 2011 financial year and approved the changes to the payments to the Supervisory Board. Significant evens following the end of the accounting period: There were no significant events after the end of the accounting period that could have a significant impact on the company s operations. 1.3 PRESENTATION OF THE COMPANY Firm: Registered office: Activity code: Size: President of the Management Board: Member of the Management Board: President of the Supervisory Board: Aerodrom Ljubljana, d.d. Zg. Brnik 130a, 4210 Brnik-aerodrom, Slovenia other auxiliary activities in air transport a large company according to the Companies Act (ZGD-1) Zmago Skobir Bernarda Trebušak Anja Strojin Štampar, MSc 3

5 Number and date of entry of conversion into a public limited company in the Companies Register: 96/01184, 28 January 1997 Registration number: VAT ID no.: SI Share capital as at 30 June 2011: EUR 15,842,626 Total number of shares as at 30 June 2011: 3,796,527 no-par value shares, of which 1,936,229 shares are ordinary freely transferable no-par value shares and 1,860,298 shares are participating preference no-par value shares with limited voting rights Quotation of ordinary no-par value shares: Designation of ordinary no-par value shares: Transaction accounts: Financial year: Ljubljanska borza, d.d., stock exchange quotation AELG Abanka d. d Nova Ljubljanska banka d.d Banka Koper d.d calendar year Activities of the company: airport management, including aircraft take-offs and landings and the use of infrastructure and the passenger terminal; ground handling services for aircraft, passengers and cargo; commercial activities: relevant retail, catering and other services, car parking for passengers and airport visitors, leasing of commercial and advertising space, warehousing and logistical services. Mission Aerodrom Ljubljana, d.d. ensures that all the airport's users are provided with flight services and other commercial services that are safe, punctual and of high quality, and attends to the development of the airport in line with carriers' and passengers' demands, the types of traffic and the requirements of the European Union. Vision In the next decade Aerodrom Ljubljana, d.d. aims to expand its infrastructure and increase its traffic to become a leading provider of air connections and services in this region, both for passenger traffic and cargo traffic. Our vision is additionally supported by the following facts: the favourable geographical location of the airport, which is a good point of departure for flights to Central, Eastern and South Eastern Europe, and for links to Western European countries; unexploited tourism potentials; state-of-the-art airport infrastructure and equipment; 4

6 the price-competitiveness of our services; and available space for development and expansion. Strategic orientation The development strategy was adopted in 2007, and defined the following strategic objectives for the company in the period to 2015: to increase the number of passengers to 2.2 million; to increase the number of aircraft movements to 57 thousand; and to increase the volume of transported cargo to 23.3 thousand tones. In the years following its adoption we overtook the strategy, but the deep-rooted changes in the situation in which the aviation industry found itself threw the achievement of the objectives and medium-term development plans by 2015 into question. The Master Plan, a study of the long-term development of the airport completed in 2010, was the response to numerous questions about the suitability of the aforementioned strategy, and will form the basis for the revision of Aerodrom Ljubljana s strategy. Organisation The company is led by a two-member Management Board. Provision of the company's core activity is organised within five sectors: traffic-technical division, aero-engineering, financial accounting department, sales division and general department. Sectors are managed by directors, while certain sectors are divided further into operational departments. In addition to advisors and experts working within the office of the Management Board, the Management Board is also supported in its work by the security and safety department. 5

7 1.4 MANAGEMENT BOARD AND SUPERVISORY BOARD There were no changes to the composition of the Management Board and the Supervisory Board during the reporting period. The Management Board has two members: Zmago Skobir, president of the Management Board and Bernarda Trebušak, member of the Management Board. The six-member Supervisory Board comprises: shareholder representatives: Anja Strojin Štampar, Msc (president), Miran Kunst, Marko Mulej in Stanislav Boštjančič, employee representatives: Drago Čotar (deputy-president) and Igor Domevščik. 1.5 SEASONAL NATURE OF OPERATIONS The company's activity is seasonal in nature and the shortfall in terms of the annual plan (with the exception of volume of cargo) is therefore proportionate. Traffic volume is highest in the summer months from June to September, both because of charter flights and because of the greater number of scheduled services. The passenger load factor is also higher in this period. 6

8 2 BUSINESS REPORT 2.1 TRAFFIC Realisation Plan Index Proportion (in %) 1-6/11 1-6/10 Pl11 R11/R10 R11/Pl11 1-6/11 1-6/10 Pl11 1 NO OF PASSENGERS 607, ,036 1,404, PUBLIC TRAFFIC 604, ,199 1,398, Domestic carriers 452, ,248 1,059, Foreign carriers 151, , , GENERAL AVIATION 2,729 2,524 5, Domestic carriers 1,311 1,313 2, Foreign carriers 1,418 1,211 3, OTHER AIRCRAFT MOVEMENTS 19,772 19,780 44, PUBLIC TRAFFIC 13,646 13,263 29, Domestic carriers 10,186 10,146 22, Foreign carriers 3,460 3,117 7, GENERAL AVIATION 5,485 6,005 13, Domestic carriers 4,619 5,273 11, Foreign carriers , OTHER , CARGO TRAFFIC (in tonnes) 10,207 7,741 19, Aircraft 3,601 3,086 7, Truck 4,629 4,002 8, Mail Ship and road break-bulk cargo 1, , Passenger numbers in the first half of the year were up 8.8% on the same period last year, but the number of aircraft movements remained at the same level. 1 Passenger numbers were 43.2% of the forecast in the annual plan, while the number of aircraft movements was 44.8% of the forecast. Although the figures appear discouraging at first sight, there was a change in the breakdown of aircraft movements in terms of aircraft type that was beneficial to the company. As a streamlining measure airlines are replacing smaller aircraft with larger aircraft (this is being seen at the majority of foreign airlines, as well as the domestic carrier), which was not foreseen in the plan. From a financial point of view this is favourable, as the price of a significant portion of our services is tied to aircraft weight; the negative impact of a decline in the number of aircraft movements was thus mitigated by the change in the breakdown by type of aircraft and the increase in the total aircraft weight. 1 Here it should be noted that there was a significant loss of traffic last April as a result of the closure of the runway for reconstruction. Had the loss not occurred, passenger numbers in the first half of this year would not have reached last year s level, while the number of aircraft movements would be down just over 8%. 7

9 150,000 Passengers by month 120,000 90,000 60,000 30,000 0 January February March April May June ,000 Aircraft movements by month 4,000 3,000 2,000 1,000 0 January February March April May June Total cargo tonnage in the first half of the year was up 31.9% on the same period last year (equivalent to 53.1% of the forecast in the annual plan). The increase can be attributed in particular to ship and road break-bulk cargo, which last year only began in May. 2,000 Cargo traffic by month 1,500 in tonnes 1, January February March April May June

10 PUBLIC PASSENGER TRAFFIC The majority of traffic at the airport is accounted for by public passenger traffic (604,184 passengers or 99.5% of the total, and 13,646 aircraft movements or 69.0% of the total in the first six months of the year). The number of passengers served was up 8.8% on the same period last year (equivalent to 43.2% of the forecast in the annual plan), while the number of aircraft movements was up 2.9% (equivalent to 46.6% of the forecast in the annual plan). A total of 556,304 passengers (up 12.5% on the same period last year) were served by scheduled flights, which are operated by seven airlines, while the remaining 47,880 passengers were served by charter flights (down 20.9% on the same period last year, primarily as a result of the political situation in North Africa). The proportion of public transport passengers accounted for by scheduled flights was up 3 percentage points on the same period last year at 92.1%, charter flights accounting for the remaining 7.9%. There was also a sharp decline in the number of transit passengers in the first half of the year to 82,630, down 15.4% on the same period last year, while the number of other passengers was up 14.0%. The decline in transit passenger numbers was primarily a reflection of a change in policy at Adria Airways, which by launching direct routes between Pristina and Frankfurt and between Pristina and Munich took away some of the passengers who had previously flown via Ljubljana. The proportion of public transport passengers accounted for by transit passengers was down 3.9 percentage points on the same period last year at 13.7%. Low-cost airline easyjet accounted for 9.7% of all public transport passengers, 3.2 percentage points more than in the same period last year as a result of the launch of its route to Paris. Its passenger numbers were up 62.7%, while the total passenger numbers of other airlines declined by 5.1%. Breakdown of public passenger traffic by carriers and destinations The domestic airline Adria Airways accounted for the majority of public transport passengers, carrying 452,513 passengers in the first six months of the year, or 74.9% of the total. Its passenger numbers were up 3.0%, while its number of aircraft movements was up 5.5%. The increase in the passenger numbers of foreign airlines meant that the proportion accounted for by the domestic airline was down 4.2 percentage points on the same period last year. The foreign airlines segment recorded an increase in traffic during the period: passenger numbers were up 30.8%, and the number of aircraft movements was up 11.0%. In addition to the new easyjet Paris route, another positive was that other foreign scheduled airlines also increased their passenger numbers thanks to better load factors, which compensated for the loss of Jat Airways (which stopped flying to Ljubljana after signing a code-share agreement with Adria Airways in early February). The end of March brought the return of Finnair, with a summer route to Helsinki. The figures showing a rise in passenger numbers for individual airlines compared with the same period last year are encouraging, although part of the increase can be attributed to the loss of traffic last April because of the reconstruction of the runway. Increases in passenger numbers were recorded by easyjet (62.7%), Finnair (48.1%), Air France (38.9%), CSA Czech Airlines (37.9%), Montenegro (20.7%) and Turkish Airlines (15.4%), while increases in the number of aircraft movements were recorded by easyjet (72.2%), Finnair (33.3%), Air France (19.9%), Turkish Airlines (9.9%), Montenegro (8.5%) and CSA Czech Airlines (8.3%). 9

11 Breakdown of public passenger traffic by carriers easyjet 9.7% Air France 4.4% Adria Airways 74.9% Csa Czech Airlines 3.1% Turkish Airlines 2.5% Montenegro 1.5% Jat Airlines 0.6% Finnair 0.2% other 3.1% Of the 31 destinations available to public transport passengers in the first six months of the year, Paris, Istanbul, Frankfurt, London, Munich and Zurich accounted for almost half of total passenger numbers. Breakdown of public passenger traffic by destinations Paris 10.4% other destinations 33.0% Istanbul 10.0% Frankfurt 9.4% Skopje 4.2% London 7.1% Moskva 4.4% Vienna 4.8% Brussels 4.9% Zurich 5.9% Munich 6.0% GENERAL AVIATION Total passenger numbers in the first half of this year were up 8.1% on the same period last year at 2,729; domestic passenger numbers stayed at the same level, while the passenger numbers of the foreign airlines were up 17.1%. By contrast, the number of aircraft movements was down 8.7%, primarily as a result of a decline in the domestic airlines number of aircraft movements (down 12.4% on the same period last year, and equivalent to 45.7% of the forecast in the annual plan), the foreign airlines having recorded an increase of 18.3% in the number of aircraft movements (equivalent to 40.4% of the forecast in the annual plan). As in public passenger transport, part of the increase in general aviation traffic can be attributed to the closure of the airport last April for the reconstruction of the runway, while part of the increase is a reflection of better weather conditions than in the same period last year. Another factor in the increase in foreign airlines number of aircraft movements is that a major domestic airline in the general aviation segment (Linxair) had practically no flights in the period in question, while more flights for domestic clients were operated by foreign airlines. 10

12 CARGO TRAFFIC Cargo traffic recorded a positive trend during the first six months of the year: tonnage was up 31.9% on the same period last year (at 10,207 tonnes), partly as a result of the easing of the economic situation, and partly as a result of the better, more-competitive services offered by airlines at Ljubljana Jože Pučnik Airport. This figure was 53.1% of the forecast in the annual plan. All categories of cargo recorded an increase compared with the same period last year, the largest being recorded by ship and road break-bulk cargo (primarily because it has only been provided since May 2010), which encompasses the reception of ship and road containerised cargo, the execution of customs procedures, and resorting by final recipient. During the reporting period, Air France and Lufthansa continued to provide scheduled road cargo services, while occasional services were provided by Korean Air, Cargolux, ČSA Czech Airlines, Adria Airways and others. In addition to DHL, the express package operators UPS and TNT are also present at the airport. The latter two are particularly important, as they use the airport as a hub for South-Eastern Europe. Increases in cargo tonnage compared with the same period last year were recorded by individual scheduled airlines, which are replacing smaller aircraft with larger aircraft (an increase in total aircraft weight), while DHL carried greater quantities of ordinary air cargo. 2.2 OPERATING RESULTS INCOME STATEMENT in euros Index Proportion 1-6/11 1-6/10 Pl2011 R11/R10 R11/Pl11 1-6/11 1-6/10 Pl2011 Operating revenues 15,466,583 14,718,040 32,187, Net sales revenue 15,377,972 14,519,423 32,049, Other operating revenues 88, , , Operating expenses 13,359,749 13,533,387 26,792, Costs of materials and services 3,836,487 4,384,390 7,996, Costs of materials 830, ,598 1,749, Costs of services 3,005,602 3,468,792 6,246, Labour costs 5,659,346 5,482,093 11,725, Depreciation / amortisation 3,592,278 3,292,160 6,689, Other operating expenses 271, , , Operating profit before interest, taxes and depreciation / amortization - EBITDA 5,699,112 4,476,813 12,084, Operating profit or loss (EBIT) 2,106,834 1,184,653 5,395, Net finance income / costs 783, , , Finance income 814, , , Finance costs 31,051 29,049 35, Profit (or loss) before tax 2,890,330 1,876,499 6,259, Income tax expense 578, ,300 1,251, Deferred tax 13,248 1, / Net profit (or loss) 2,299,016 1,499,591 5,007,

13 Despite the persistent relatively adverse economic situation, the company s performance in the first half of this year was reasonably encouraging, a reflection of the increase in traffic in the foreign airline and cargo segments, and of constant monitoring of costs and the prompt adjustment of costs to the current situation. Profit generated in the first half of the year was higher than in the same period last year, although in the year-on-year comparison allowance has to be made for the loss of approximately EUR 1 million in revenue last April because of the reconstruction of the runway. Operating income amounted to EUR 15,467 thousand, up 5.1% on that generated in the same period last year, 2 and equivalent to 48.1% of the forecast in the annual plan. Operating expenses were down 1.3% on the same period last year, and equivalent to 49.9% of the forecast. EBITDA was up 27.3% on the same period last year 3 at EUR 5,699 thousand (equivalent to 47.2% of the forecast in the annual plan). EBIT stood at EUR 2,107 thousand, up 77.8% on the first half of last year, 4 and equivalent to 39.1% of the forecast in the annual plan. Pre-tax profit amounted to EUR 2,890 thousand, up 54.0% on the first half of last year 5 and equivalent to 46.2% of the forecast in the annual plan. The company's net profit of EUR 2,299 thousand (equivalent to 45.9% of the forecast in the annual plan) was also up on the same period last year, by 53.3%. Operating revenues The operating income generated in the first half of this year reflects the changes in the breakdown of traffic in that period that is beneficial to the company. As explained previously with regard to traffic, the majority of airlines are streamlining by replacing smaller aircraft with larger aircraft (the domestic airline also increased its proportion of flights with larger aircraft). There is an increase underway in aircraft weight, which is the basis for charging a significant portion of our services. An increase in traffic in the foreign airline segment (a new easyjet route to Paris, maintenance of existing routes and frequencies, higher load factors) compensated for the loss of traffic at the domestic airline and the loss of traffic caused by the withdrawal of Jat Airways (which ceased to fly to Ljubljana in February). The loss of the domestic airline s public transport passengers was compensated for by an increase in foreign passenger numbers, which generate a higher price per passenger. Another beneficial factor in the income generated was a change in the breakdown of the domestic airline s passengers: there was a decline in the proportion accounted for by transit passengers, to whom a lower passenger charge applies. All this resulted in operating income of EUR 15,467 thousand (equivalent to 48.1% of the forecast in the annual plan). This was up 5.1% on the same period last year, as a result of the closure of the airport last April for the reconstruction of the runway (otherwise operating income would be at the same level as last year). The vast majority (99.4%) of operating income consists of sales revenue, which amounted to EUR 15,378 thousand, up 5.9% on the same period last year. The proportion of income generated on the domestic market declined slightly (from 76.3% last year to 75.8% this year), while the proportion generated on the foreign market increased (from 23.7% last year to 24.2% this year). Both markets saw an increase in income relative to last year, although the increase was slightly higher on the foreign market. 6 Among the individual types of operating income, revenues from commercial services were up 10% on the same period last year and revenues from airport services were up 9.1%, while revenues from ground handling services were down 2 Had there been no loss of revenue in April 2010, this year s revenues would have been at the level of last year. 3 Had there been no loss of revenue because of the closure of the runway last April, the increase would be 6.9%. 4 Had the airport not closed last April, the increase would be 3.3%. 5 Had the airport not closed last April, the increase would be 5.8%. 6 Income on the domestic market was up 5.2% on the same period last year, while income on the foreign market was up 8.3%. 12

14 3.3% as a result of a decline in the amount of deicing provided (in connection with the weather conditions, and also as a result of lower consumption of deicing fluid). Revenues from airport services amounted to 46.9% of the forecast in the annual plan, revenues from ground handling services to 47.6%, revenues from commercial services to 49.8% and other income to 55.8%. Operating revenues by type in thousand euros 8,000 7,000 6,000 5,000 4,000 3,000 7,630 6,994 2,996 3,099 4,355 3,956 2,000 1, Airport services Ground handling services Commercial services Other 1-6/11 1-6/10 There were no significant changes in the breakdown of operating income. Revenues from airport services account for just under half of the total, revenues from commercial services for just over 28% and revenues from ground handling services for just under 20%. Operating revenues structure Airport services Ground handling services Commercial services Other 0% 10% 20% 30% 40% 50% 1-6/ /

15 Operating expenses Operating expenses in the first six months of the year were down 1.3% on the same period last year at EUR 13,360 thousand, and it should be noted that certain operating expenses were slightly lower in the same period last year because of the closure of the airport during the reconstruction of the runway (electricity costs, security costs). This figure was 49.9% of the forecast in the annual plan. Realised operating expenses were 86.4% of operating income (compared with 92.0% in the same period last year 7 ). The largest increase compared with the same period last year was recorded by amortisation and depreciation costs, which were up 9.1% (at 53.7% of the forecast in the annual plan), as a result of the contractual arrangements for superficies for the new passenger terminal. Labour costs were up 3.2%, solely as a result of the replacement of cooperation with an employment agency (the costs for this form of labour are booked as service costs) with temporary employment, and were equivalent to 48.3% of the forecast in the annual plan. Total labour costs including agency work and student work were down 2.7% on the same period last year. Material costs were down 9.3% on the same period last year (equivalent to 47.5% of the forecast in the annual plan), while service costs were down 13.4% (equivalent to 47.5% of the forecast in the annual plan). Operating expenses by type in thousand euros 6,000 5,000 5,659 5,482 4,000 3,000 3,006 3,469 3,592 3,292 2,000 1, Costs of materials Costs of services Labour costs Depreciation / amortisation Other operating expenses 1-6/11 1-6/10 The increase in amortisation and depreciation costs and the replacement of agency work with temporary employment were reflected in the breakdown of operating expenses. The proportion of operating expenses accounted for by labour costs was up 1.9 percentage points on the same period last year at 42.4%, while the proportion accounted for by service costs was down 3.1 percentage points at 22.5%. The increase in amortisation and depreciation costs was reflected in the proportion that they account for increasing to 26.9%, up 2.6 percentage points on the same period last year. 7 Had there been no loss of operating income because of the closure of the runway in April 2010, operating expenses in the same period last year would have amounted to 86.9% of operating income. 14

16 Operating expenses structure Materials Services Labour Depreciation / amortisation Other 0% 10% 20% 30% 40% 50% 1-6/ / BALANCE SHEET Total assets stood at EUR 131,155 thousand as at 30 June 2011, up 2.4% on the balance as at 31 December Assets At 82.4%, non-current assets account for the highest proportion of total assets, while current assets account for 17.6%. The value of investments in associates, the value of intangible assets, the value of current trade and other receivables and the total value of financial assets were up compared with the beginning of the year, while the value of property, plant and equipment was down. 100,000 Assets 80,000 85,012 81,980 in thousand euros 60,000 40,000 33,583 32,239 20, ,169 1,100 Intangible assets Property, plant and equipment Financial assets 5,340 6,0425,097 2,917 Investments in associates Current trade and other receivables 2,0411,743 Other assets

17 Intangible assets Intangible assets amounted to EUR 2,169 thousand as at 30 June 2011, up 97.2% on 31 December 2010, primarily as a result of the acquisition of superficies for Terminal 2. Property, plant and equipment The value of property, plant and equipment was down 3.6%. There was a slight increase in the value property, plant and equipment in acquisition, while there was a decline in the value of buildings, plant and equipment. in thousand euros Index 11/10 Land 14,558 14, Buildings 52,047 53, Plant and equipment 11,579 13, Property, plant and equipment in acquisition 3,796 3, Total 81,980 85, Financial assets As at 30 June 2011 non-current and current financial assets accounted for 25.6% of total assets (compared with 25.2% as at 31 December 2010), and were up 4.2% on the balance as at 31 December 2010: in thousand euros Index 11/10 Non-current financial assets 17,422 17, Current financial assets 16,161 15, Total 33,583 32, The table below illustrates financial assets by type. in thousand euros Index 11/10 Non-current financial assets 17,422 17, available-for-sale financial assets 17,242 17, long term loans Current financial assets 16,161 15, short term loans 16,161 13, current financial assets, excluding loans 0 1,867 - Total 33,583 32, * Current financial assets, excluding loans are recorded among non-current financial assets during the year. The current portion of non-current financial assets in the amount of EUR 1,698 thousand was disclosed among current financial assets as at 31 December The current portion of non-current financial assets was disclosed among non-current financial assets as at 30 June

18 Investments in associates Investments in associates amounted to EUR 5,340 thousand as at 30 June 2011, equivalent to 4.1% of total assets on the balance sheet. This was up EUR 2,423 thousand on 31 December 2010, as a result of an increase in the participating interest in Adria Airways Tehnika d.d. Current trade and other receivables Current trade and other receivables accounted for 4.6% of total assets as at 30 June The proportion of total assets they account for was up 0.6 percentage points on the balance as at 31 December The reason for the increase was an increase in current receivables as at 30 June caused by higher traffic in May and June compared with November and December (the seasonal nature of performance). in thousand euros Index 11/10 Current trade receivables from customers 5,475 4, Current trade receivables from others Total 6,042 5, Equity and liabilities Capital and reserves account for 92.6% of equity and liabilities, followed by non-current liabilities at 2.3% and current liabilities at 5.1%. All of the company's assets are financed by its own capital, while the company has no liabilities from financing activities. There was a slight increase in owner s equity compared with 31 December 2010, while current operating liabilities were up 72.8% (in connection with liabilities for dividend payments for the 2010 financial year). Total non-current liabilities were down 4.7%, primarily as a result of a decline in provisions and in non-current accruals and deferred income. Equity and capital 140, , , , ,000 in thousand euros 80,000 60,000 40,000 20, ,107 3,535 3,571 3,293 Capital and equity Current liabilities Other

19 Current trade and other payables Current trade and other payables were up on 31 December 2010, primarily as a result of liabilities for dividends for the 2010 financial year (EUR 1,880 thousand), which were disclosed among other current operating liabilities. in thousand euros Index 11/10 Current trade and other payables from suppliers 3,117 2, Other current trade and other payables 2,990 1, Total 6,107 3, DATA ON COMPANIES UNDER THE MAJORITY OWNERSHIP OF AERODROM LJUBLJANA, D.D. Company Address Ownership interest in % Book value of the investment in euros Aerodrom Portorož, d. o. o. * Sečovlje 19, Sečovlje Adria Airways Tehnika d. d. ** Zg. Brnik 130 h, Brnik-aerodrom ,340,409 2,917,136 Feniksšped, d. o. o., Brnik *** Zg. Brnik 130 e, Brnik-aerodrom * Investment stood at EUR 1,251,878 in nominal terms, and an adjustment for the entire amount was created in ** Investment stood at EUR in nominal terms, and an adjustment in the amount of EUR 1,653,745 was created in *** Investment stood at EUR 53,205 in nominal terms, and an adjustment for the entire amount was created in INVESTMENTS IN BUILDINGS AND EQUIPMENT in thousand euros Buildings 1,562 Computer equipment 8 Other airport equipment 60 Total 1,630 Investment in buildings and equipment is proceeding according to the development strategy adopted for the 2007 to 2015 period, but the findings of the Master Plan drawn up in 2010 are also being taken into consideration. EUR 1,562 thousand was earmarked for buildings in the first half of 2011, while the remainder was used to purchase other airport equipment (EUR 60 thousand) and computer equipment (EUR 8 thousand). The investments were financed with internal resources. The majority of investment in the period related to the superficies for a period of 40 years for the existing passenger terminal, the new passenger terminal and outside facilities (EUR 1,374 thousand). The project documentation for the utilities infrastructure at the Commercial and Logistics Centre was also finalised (an investment of EUR 87 thousand). The major items of other airport equipment were the purchase of an electric forklift with a 1.6 tonne capacity and a car for follow-me purposes. 2.4 EMPLOYEES The average number of employees calculated from the total number of hours worked (including student work and agency work) in the first half of the year stood at 441, down 4.5 on the same period last year. 18

20 With the aim of adjusting to the change in the volume of traffic we are continuing with flexible forms of employment (temporary employment, work arranged by the student employment service), having recorded an increase of 6.4% in the amount of full-time work (primarily on account of temporary employment) and an increase of 7.1% in the number of student work hours compared with the same period last year, and having practically ceased working with the employment agency (the hours worked were down 95 % on the same period last year). Average number of employees calculated from total hours worked (total and by type of employment) total full-time hours student work /11 1-6/10 agency In the first half of 2011 total labour costs (including the costs of student work and work through the employment agency) were down 2.7% on the same period last year. The in-house transfer of knowledge (this form of training is given great emphasis, given the specific nature of our line of business, and is constantly upgraded) was supplemented with outside forms of training, for which EUR 25 thousand was earmarked during the period in question. The company had 417 regular employees (333 full-time and 84 part-time) as at 30 June 2011, representing a drop of 19 employees on the balance as at 30 June RISK MANAGEMENT There was no significant change in the company s exposure to business and financial risks during the period in question and in the second half of 2011, as is evident from the Annual Report for During the economic crisis it became more than obvious how strongly the general economic situation impacts on traffic, and that the recovery will not be quick or easy. Financial difficulties forced airlines into streamlining measures, which were also felt not least by airports in the form of a decline in traffic (aircraft movements). In light of this, mastery of the market and of market shares is of even greater importance to the company, for which reason we place great emphasis on attracting new airlines, and simultaneously on commercial activities where we see an opportunity for development and increased revenues, and additional strengthening of the competitive position. We constantly monitor the performance of the domestic airline. In our dependence on the domestic airline, it should be remembered that in providing commercial services we are satisfying needs of our passengers that are not strictly tied to it. As seen from the past experience of certain European airports, the loss of a domestic airline meant certain short-term difficulties for those airports, but in no way threatened their existence, as market potential remains nonetheless. 19

21 2.6 OWNERSHIP STRUCTURE AND AELG SHARE As at 30 June 2011, the company had 8,240 shareholders, a 4.9% down on 31 December 2010 and 7.7% down on 30 June There have been no significant changes in the major shareholders of the company in the first half of Other legal entities 16,20% Private individuals 18,95% Republic of Slovenia 50.67% Slovenian Restitution Fund, d.d. 6.82% Pension Fund, d.d. 7.36% Ten largest company shareholders as at 30 June 2011: No. of shares Holding in % 1 Republic of Slovenia 1,923, Pension Fund, d.d. 279, Slovenian Restitution Fund, d.d. 258, Zavarovalnica Triglav, d.d. 151, Publikum Trezor d.o.o. 101, Abanka d.d. 49, KD Rastko, delniški vzajemni sklad 48, Triglav Vzajemni skladi - delniški 48, KD Galileo, fleksibilna struktura 27, NLB Skladi - Slovenija delniški 17, The company's ten largest shareholders held 2,905,393 shares (a 76.52% holding in the capital of the company). Foreign shareholders held 48,950 shares (a 1.29% holding in the capital of the company). As at 30 June 2011 two members of the Supervisory Board held shares in the company, while the members of the Management Board did not hold any shares as at the aforementioned date: Drago Čotar Igor Domevščik No. of shares Holding (in %)

22 Slovenian capital market and AELG share in the first half of Change in AELG closing share price in the first half of 2011 on Ljubljana Stock Exchange SBITOP AELG SBITOP AELG The closing price of AELG shares fell 22,9% in the first half of The closing share price stood at EUR as at 30 June 2011, while the average closing share price was up EUR 1.52 during the reporting period. The SBI TOP is also recording negative movements, having fallen by 12.7% this year, and reached an all-time low in June. Slovenia s stock market is still well behind major global markets, as the country s weak fiscal position and the tough conditions in the financial environment are being reflected in low trading volume and average performance on the Ljubljana Stock Exchange. Despite an improvement in performance at numerous companies and more-favourable share valuations, without an increase in liquidity there can be no expectation of growth in share prices (total volume on the Ljubljana Stock Exchange amounted to EUR 42 million in June 2011, compared with EUR 310 million in June 2007 before the crisis). The highest closing share price was achieved on 12 May (EUR 14.00), while the highest volume of trading was achieved on 23 March (EUR thousand). The volume of trading in AELG shares was EUR thousand in the first half of 2011, representing 0.3% of the total volume of trading on the Ljubljana Stock Exchange. Market capitalisation stood at EUR 28.1 million as at 30 June 2011, representing 0.1% of the total market capitalisation of shares on the Ljubljana Stock Exchange. 21

23 Index 11/10 Market capitalisation on 30 June* - in thousand euros 28,075 48, Turnover - in thousand euros 850 1, Lowest closing share price - in thousand euros Highest closing share price - in thousand euros Average closing share price - in thousand euros Closing share price on 30 June - in euros Book value of shares on 30 June - in euros (capital and reserves / total number of shares issued) Closing share price to book value of shares on 30 June Diluted earnings per share - in euros (net profit (or loss) / total number of shares issued)** Total comprehensive income per share (total comprehensive income for the period / total number of shares issued) Total number of shareholders on 30 June 8,240 8, Total number of shares issued 3,796,527 3,796, participating preference no-par value shares 1,860,298 1,860, ordinaray no-par value shares, listed on stock exchange 1,936,229 1,936, * Ordinary no-par value shares, listed on stock exchange used in calculation. ** All shares used in calculation. Payment of dividends Pursuant to the resolution of the general meeting, the holders of ordinary and participating preference no-par value shares will be paid dividends for the 2010 financial year in September. Dividends will be paid in the gross amount of EUR 0.43 per ordinary no-par value share, a decrease of 31.7% on the previous year. Dividends for participating preference no-par value shares are calculated in accordance with the provisions of the company's Articles of Association. 22

24 3 FINANCIAL REPORT 3.1 UNAUDITED FINANCIAL STATEMENTS BALANCE SHEET in euros ASSETS 131,155, ,108,228 Non-current assets 108,020, ,384,765 Intangible assets 2,168,871 1,100,320 Property, plant and equipment 81,980,069 85,011,857 Investments in associates 5,340,409 2,917,136 Non-current financial assets 17,421,965 17,232,841 Deferred tax assets 1,109,363 1,122,611 Total current assets 23,134,527 20,723,463 Current assets excluding deferred expenses and accrued income 23,119,485 20,591,639 Inventories 187, ,320 Current financial assets 16,160,774 15,005,984 Current trade and other receivables 6,042,119 5,096,792 Cash and cash equivalents 728, ,543 Current deferred expenses and accrued income 15, ,824 EQUITY AND LIABILITIES 131,155, ,108,228 Capital and reserves 121,477, ,280,314 Issued capital 15,842,626 15,842,626 Share premium 24,287,659 24,287,659 Profit reserves 73,504,067 73,195,482 Revaluation surplus 5,544,183 5,816,817 Retained earnings 2,299,016 2,137,730 Total non-current liabilities 2,980,399 3,126,735 Provisions and non-current accruals and deferred income 1,253,277 1,346,128 Provisions for termination benefits and jubilee benefits 773, ,506 Non-current accruals and deferred income 479, ,622 Non-current liabilities 1,727,122 1,780,607 Non-current trade and other payables 341, ,403 Deferred tax liabilities 1,386,046 1,454,204 Total current liabilities 6,697,254 3,701,179 Current liabilities 6,107,111 3,534,825 Current trade and other payables 6,107,111 3,534,825 Current accruals and deferred income 590, ,354 23

25 3.1.2 INCOME STATEMENT AND STATEMENT OF TOTAL COMPREHENSIVE INCOME in euros 1-6/11 1-6/10 Operating revenues 15,466,583 14,718,040 Net sales revenue 15,377,972 14,519,423 Other operating revenues 88, ,617 Operating expenses -13,359,749-13,533,387 Costs of materials and services -3,836,487-4,384,390 Costs of materials -830, ,598 Costs of services -3,005,602-3,468,792 Labour costs -5,659,346-5,482,093 Depreciation / amortisation -3,592,278-3,292,160 Other operating expenses -271, ,744 Operating profit or loss (EBIT) 2,106,834 1,184,653 Net finance income / costs 783, ,846 Finance income 814, ,895 Finance costs -31,051-29,049 Profit (or loss) before tax 2,890,330 1,876,499 Income tax expense -578, ,300 Deferred tax -13,248-1,608 Net profit (or loss) for the period 2,299,016 1,499,591 Other comprehensive income for the period -272,634-47,470 Changes to the fair value of available-for-sale financial assets -292,791-59,342 Disposal of available-for-sale financial assets -48,001 5 Effect of deferred tax - changes to the fair value of available-for-sale financial assets 58,558 11,867 Effect of deferred tax - disposal of available-for-sale financial assets 9,600 0 Total comprehensive income for the period 2,026,382 1,452,121 Basic earnings per share Diluted earnings per share

26 3.1.3 CASH FLOW STATEMENT in euros CASH FLOWS FROM OPERATING ACTIVITIES 1-6/11 1-6/10 Net profit or loss 2,312,264 1,501,199 Profit or loss before tax 2,890,330 1,876,499 Income tax expense and other taxes not included in operating expenses -578, ,300 Adjustment for 2,889,047 2,810,190 Depreciation / amortisation of property, plant and equipment and intangible assets 3,592,278 3,292,160 Gain/loss on disposal of property, plant and equipment and intangible assets ,083 Revaluation of receivables 139,386 51,642 Creation / reversal of provisions -61,316-98,770 Finance income -796, ,896 Finance costs 14,433 16,971 Net cash generated by operating activities before working capital 5,201,311 4,311,389 Changes in working capital of operating items in balance sheet 232,582-3,018,743 Change in trade and other receivables -1,084,713-1,806,179 Change in deferred expenses and accrued income 116,782 53,775 Change in inventories 49,695 95,753 Change in trade and other payables 758,564-1,338,553 Change in accruals and deferred income 392,254-23,539 Cash generated from operations 5,433,893 1,292,646 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from investing 17,917,282 20,165,069 Proceeds from interest and profit participation from investing 808, ,577 Proceeds from disposal of intangible assets 43 0 Proceeds from disposal of property, plant and equipment ,931 Proceeds from disposal of non-current financial assets 1,291, ,952 Proceeds from disposal of current financial assets 15,816,800 18,218,609 Investing outflows -22,873,001-21,360,246 Payments for intangible assets -1,429,310-86,456 Payments for property, plant and equipment -200,737-4,552,206 Payments for non-current financial assets -2,423, ,999 Payments for acquisition of current financial assets -18,819,676-16,221,585 Net cash (used in)/generated by investing activities -4,955,719-1,195,177 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from financing activities 0 0 Payments from financing activities Dividend payments Net cash (used in)/generated by financing activities Cash and cash equivalents at the end of the year 728, ,783 Net cash flows for period 477,424 96,750 Cash and cash equivalents at the beginning of the year 251, ,033 25