March 21 (Bloomberg) -- Flughafen Wien AG, the operator of Vienna airport, proposed cutting its dividend in half to 1 euro a share, a sharper reduction than analysts expected, after profit plunged 58 percent last year because of writedowns.
Net income dropped to 31.6 million euros ($41.9 million) from 75.7 million euros a year earlier, the Schwechat, Austria-based operator said in a statement today. The dividend was only expected to be cut to 1.30 euros from 2 euros, according to Bloomberg research and analysis.
“Measures implemented to reduce costs and improve productivity are taking effect,” Chief Financial Officer Guenther Ofner said in the statement. Further cost cuts are needed to keep debt in check while continuing investments at the airport serving the Austrian capital, he said.
Flughafen, controlled by the city of Vienna and the province of Lower Austria, revamped management after delays and cost overruns at the new Skylink terminal at Vienna airport caused losses. The airport, whose most important customer is Deutsche Lufthansa AG’s Austrian Airlines, is also under pressure to reduce fees for carriers.
The earnings drop in 2011 was mainly the result of charges booked in the third quarter on Skylink and on the company’s Slovak airport, the company said. Skylink, which was planned to open in 2006 and cost 210 million euros, is now scheduled to start operations June 5, and will have cost “less than” 770 million euros, Flughafen said.
Net income this year will probably rise to more than 50 million euros, Flughafen Wien said. That compares with the average of 45.7 million euros from eight analyst estimates compiled by Bloomberg. The company plans to keep debt at less than 800 million euros, or four times annual earnings before interest, tax, depreciation and amortization, it said.
Flughafen Wien rose 0.2 percent to 27.25 euros at the 5:30 p.m. close of trading in Vienna. That pared the stock’s decline this year to 6.8 percent, valuing the company at 572 million euros.
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