One of Veronica Sjödin’s many tasks at Åre Östersund <strong>Airport</strong> is to work with preventive and emergency fire and rescue services.<strong>LFV</strong>s Flygtrafiktjänster medarbetare > <strong>LFV</strong> 2007
Accounts for 2007Comments on income statementsOperating revenue<strong>LFV</strong>’s sales increased in 2007 by 5 percent or SEK 293 M. Operating revenuetotalled SEK 6,273 M (5,980), dividedbetween SEK 3,985 M (3,877) in aviationrevenue and SEK 2,288 M (2,103) inother operating revenue.Aviation revenue increased by SEK108 M or 3 per cent despite a reductionin passenger charges for internationaltraffic equivalent to more than SEK 60M. One strong contributing factor wasthe favourable passenger trend in internationaltraffic, which increased by morethan 5 per cent. Charges for air navigationservices and security screening alsoincreased, since they are structured to becost-related (that is, revenue is continuouslyadjusted to be equivalent to costsin these areas). Air Navigation Servicesexpenses increased due to the training ofnew air traffic controllers and higher salaryand pension expenses. Stricter securityrequirements related to screening ofpassengers and baggage meant higherexpenses for airport security screening.Other operating revenue rose by SEK185 M or 9 per cent. <strong>The</strong> increase in passengernumbers contributed substantiallyto this increase, due to greaterdemand for commercial services andproducts provided at airports. Among thechanges during 2007 were expanded utilisationof terminal space at major airportsin the form of shops, restaurantsetc. Higher revenue from car parking andgreater demand for specialist and consultantservices also resulted in higher revenue.This trend is well in line with <strong>LFV</strong>’sstrategy of gradually increasing its earningsfrom commercial products, in orderto permit unchanged or reduced chargesfor airport infrastructure.Revenue also included a repaymentof more than SEK 60 M in real estate taxfrom the Swedish Tax Agency. This repaymentis the effect of a ruling of the AdministrativeCourt of Appeal related to a disputebetween <strong>LFV</strong> and the Tax Agencyconcerning real estate tax for the SkyCityproperty at Stockholm-Arlanda <strong>Airport</strong>.Operating expensesOperating expenses totalled SEK 5,458M (5,240), which was SEK 218 M or 4per cent higher than the preceding year.Staff expenses totalled SEK 2,270 M(2,138). SEK 59 M of the increase ofSEK 132 M consisted of a nonrecurringeffect of the increase in pension liabilityin the 2007 accounts. <strong>The</strong> remainingincrease of SEK 73 M was primarily dueto salary increases. During the summerof 2007, <strong>LFV</strong> signed a multi-year salaryagreement with operational staff in theAir Navigation Services Division, whichincreased expenses but also helped safeguardthe capacity that the aviation marketdemands.Various external expenses amounted toSEK 2,028 M (1,915), which was SEK 113M higher than the preceding year. A significantportion of the cost increase was dueto stricter security standards for screeningof passengers and their baggage at airports,especially because of the new liquidrules that were introduced in the autumnof 2006. At Stockholm-Arlanda and otherairports, security screening points arestaffed by an outside operator. Aside fromthe direct expenses of security screeningpoints, <strong>LFV</strong> invested in measures to easepassenger flows and reduce queuing times.<strong>LFV</strong> increased its training of air trafficcontrollers in order to boost the longtermcapacity of Air Navigation Services,which resulted in higher expenses.Part of the increase in expenses also consistedof activities under way to expandcommercial operations. Special expensesfor future needs related to environmentalimprovement activities were also set asidein the accounts.Depreciation/amortisation amountedto SEK 1,160 M (1,187).Operating profitOperating profit amounted to SEK 816M (731), an improvement of SEK 85 Meven though profit for the year includeda nonrecurring effect of SEK 59 M inhigher pension liability. Operating profitincluded <strong>LFV</strong>’s share in the earnings ofthe associated companies Cityflygplatseni Göteborg AB, Nordic <strong>Airport</strong> PropertiesAB and Entry Point North AB, totallingSEK 0 M (-9). <strong>The</strong> main reason forthe improvement compared to the precedingyear was that on December 31,2006, <strong>LFV</strong> sold its stake in Västerås FlygplatsAB, which was included amongassociated companies during 2006.Net financial itemsFinancial expenses included SEK 1,054M related to a nonrecurring increase inpension liability. Excluding this expense,financial income and expenses (net financialitems) totalled SEK -307 M (-284)and included a capital loss from the saleof the subsidiary Sturup Handling AB toNovia Sverige AB. <strong>The</strong> company was soldin November and represented a loss ofSEK 25 M in the accounts.Interest expenses on borrowings fromthe National Debt Office declined by SEK22 M compared to the preceding year dueto lower debt. <strong>The</strong> interest portion of theyear’s pension expenses, excluding thenonrecurring effect, rose by SEK 22 M.Profit after financial itemsProfit after financial items in 2007 amountedto SEK -545 M (447). Excluding thenonrecurring effect of the pension liability,profit amounted to SEK 568 M and wouldthus have been the best profit since 2000.<strong>LFV</strong> Holding AB<strong>LFV</strong> Holding AB was established in 1995to coordinate and manage the activitiesof <strong>LFV</strong>’s limited liability companies.In 2007, sales of <strong>LFV</strong> Holding ABwere SEK 219 M (214). During the year,sales increased mainly at Swedavia ABand Arlanda-Schiphol Development AB.In November 2007, Sturup Handling ABwas sold to Novia Sverige AB.Profit before taxes was SEK 14 M(24). <strong>The</strong> decline was due to a capital lossin connection with the sale of SturupHandling AB.SubsidiariesSwedavia AB is a wholly owned subsidiaryof <strong>LFV</strong> entrusted with carrying out exportorientedconsulting operations in the fieldof civil aviation.<strong>LFV</strong> <strong>Airport</strong>Center AB (LAC) is awholly owned subsidiary that manages theArlanda 2:2 site leasehold, which is leasedto Stockholm-Arlanda <strong>Airport</strong>.Flygplatsfastigheter i Landvetter ABis a wholly owned subsidiary that mainlyworks with owning, managing and leasingcargo terminals to other companies, landand forest management, leasing of realestate for residential and leisure purposesand administrative services.<strong>The</strong> subsidiary Arlanda SchipholDevelopment Company AB (ASDC AB)is 60 per cent owned by <strong>LFV</strong> Holding AB,and the remainder is owned by the Netherlands-basedSchiphol International BV.<strong>The</strong> company further develops commercialbusinesses in the terminals at Stockholm-Arlanda <strong>Airport</strong>.Associated companies<strong>LFV</strong> owns Nordic <strong>Airport</strong> PropertiesAB (NAP) together with GEGAC VikingAB, a company in the General Electric<strong>Group</strong>. <strong>The</strong> two owners each hold 50 percent and the purpose of the company isto develop and acquire mainly cargorelatedproperties at Swedish airports.Cityflygplatsen i Göteborg AB runscivil aviation operations at Säve <strong>Airport</strong> inGothenburg, focusing mainly on low farecarriers. <strong>LFV</strong> owns a 40 per cent stake. <strong>The</strong>other owners are Volvo AB with a 40 percent stake and the Municipality of Gothenburgwith 20 per cent.<strong>LFV</strong> owns 33 per cent of Entry PointNorth AB. <strong>The</strong> company engages in air trafficservices training and is co-owned byDenmark’s Naviair and Norway’s Avinor AS.26> <strong>LFV</strong> 2007 < Comments on income statements
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