Olympics hits Heathrow's profits - FT.com Heathrow airport has warned that a slowdown in traffic prompted by the London Olympics means full-year profits will miss expectations. In a disappointing coda to the glitch-free games, Heathrow airport Holdings Ltd, formerly known as BAA, said about 400,000 fewer travellers passed through its doors this July and August compared to last summer. "The Olympics resulted in UK-based travellers staying in the country to enjoy the games and non-UK travellers avoiding travelling to the UK due to concerns over disruption caused by the games," it said, announcing results for the nine months to October. Underlying full-year earnings before interest, tax, depreciation and amortisation are set to come in "marginally lower" than the £1.27bn forecast in June, the company said. But José Leo, chief financial officer, argued that the miss was worth the benefits that Heathrow, the official airport for the games, would glean from the event. "It will pay much more over time than the impact of a couple of hundred-thousand lost passengers," he said, citing the reputational boost from the airport's smooth running and the prospect of Olympics-inspired tourists visiting the UK in future years. Mr Leo added that games-related costs would be lower than anticipated, at about £16.5m compared with estimates of £20m. As well as recruiting volunteers, training staff and adding wheelchair facilities, the airport built a temporary games terminal - designed to look like a London park - for departing Olympians. Despite the late-summer dip, record numbers of passengers passed through Heathrow in the first nine months of the year, pushing revenues 8 per cent higher than last year to £1.8bn. The group moved from a £147m pre-tax loss last year to a £112m gain thanks to a better performance on inflation-linked derivatives. But traffic at Stansted - Heathrow Ltd's second-biggest airport, which it is selling under orders from competition authorities - fell almost 5 per cent. "It continues to be a dog of a business," said one credit analyst. Proceeds from the sale will go towards paying down the group's £11.3bn in securitised net debt. The debt currently represents 78 per cent of the estimated £14.5bn asset value of Heathrow and Stansted, below the 85 per cent limit set by covenants. But when Stansted is sold, the asset base will fall by £1.35bn, meaning the company will need to reduce debt accordingly. Free cash flows were negative in the period, after spending on baggage systems and new Terminal 2 buildings, interest payments and £180m in dividend payments to the company's owners, led by Spanish infrastructure group Ferrovial. Mr Leo said he expected dividend payments to continue at approximately the same rate of £60m a quarter.