Copenhagen Shopping Centre suffers 3.2% fall in 2005

Emily Pacey

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Shopping centre revenues fell at Copenhagen airport last year, but traffic and other commercial revenues rose due to an increase in activities at the airport hotel, according to 2005 results

International airports group Copenhagen Airports posted a 3.2% fall in revenue at Copenhagen Kastrup airport's shopping centre in 2005, despite a rise in group revenues of 10.1% to DKK1,097.9m ($175.8m), driven by an increase in activities at the Copenhagen airport hotel.

Revenues at Copenhagen Shopping Centre fell to DKK425m ($68.1m) although passenger traffic grew by 5% to 20m. The group attributed this to lower duty- and tax-free sales following the accession of ten new EU member states in May 2004. It also mentioned the introduction of duty- and tax-free sales at arrivals in Norwegian airports in July 2005 as a contributory factor.

Copenhagen Airports said that 2005 had been a difficult year for concession operator The Nuance Group. It stated: "The shops experienced a number of out-of-stock situations, especially due to logistical problems." The airports group introduced a SAP system in late 2005 to "provide the necessary lift to logistics".

However, the group also reported that online sales of duty- and tax-free products grew six-fold to DKK9.1m ($1.5m) in 2005 compared to 2004, which the company said would allow passengers time immediately before departure for "relaxing or making use of the airports other facilities", such as the food and beverage facilities, an category which rose by 66% in 2005.

Internationally, the airports group enjoyed a year of growth in which revenues rose by 35.5% to DKK38.7m ($6.2m), boosted by increased revenues at Newcastle International Airport in the UK and a consulting contract in Oman. The strength of these activities offset the effect of passenger traffic losses made at the ASUR airports in Mexico, which were badly affected by the hurricane season, and by a decline in passenger numbers at Hainan Meilan airport in China, due to insufficient aircraft capacity.

Based on expected traffic growth of between 4% and 6% at Kastrup, pre-tax group profit is expected to be about DKK1.0 billion ($160m) in 2006.