Incheon International Airport Corp.

Overview Key strengths Key risks Dominant position as the leading international airport in Korea and a top hub in northeast Asia. Large capital spending for airport expansion weighs on financial metrics. Almost certain likelihood of extraordinary government support during financial stress, given pivotal role in Korea's transport infrastructure. Inflexible cost structure with sizable operating expenses, from a high portion of labor and outsourcing costs. Solid track record in non-aeronautical revenue, particularly in duty-free business. Weak economic conditions could restrain traffic growth. Traffic has recovered to about 79% of 2019 levels as of end-2023. We expect a full recovery to pre-pandemic levels by end-2024. All revenue streams will likely recover over the next two years. Along with higher passenger traffic, the

...A full recovery in passenger traffic with newly added capacity (Phase 4) should help Incheon International Airport Corp. (IIAC) record a robust operating performance. Traffic has recovered to about 79% of 2019 levels as of end-2023. We expect a full recovery to pre- pandemic levels by end-2024. All revenue streams will likely recover over the next two years. Along with higher passenger traffic, the opening of Phase 4 facilities could further boost IIAC's revenue on the back of increased handling capacity. Duty-free shops opening in the new area will also contribute to profits, given their good margins. We expect EBITDA to increase to Korean won (KRW) 1.1 trillion-KRW1.4 trillion in 2024-2025, from our estimate of KRW960 billion for 2023. Capital expenditure (capex) could peak in 2024 and fall substantially from 2025. Phase 4 expansion has so far been on time and on budget. The target completion date remains the later part of 2024. We expect IIAC's capex to peak at KRW2 trillion in 2024...

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