Lufthansa Releases First Quarter Financial Numbers

 

Despite €64 million in restructuring costs from SCORE, the airline's operating result remained stable and the earnings outlook for the year are unchanged.

In the traditionally weak first quarter, Deutsche Lufthansa AG recorded an operating result on a par with last year at a loss of €359 million. The operating result includes restructuring costs of €64 million from the SCORE program. Earnings improvements in the operating segments helped the Group make up for the extra costs. The net result for the period fell by 16.5 percent to €-459 million due to impairment losses and other valuations as of the reporting date. At €6.6 billion, revenue for the Lufthansa Group in the first quarter remained stable.

In operational terms, the Group improved its result by a total of €95m in the Passenger Airline Group, Logistics, MRO, Catering and IT Services segments. Lufthansa German Airlines achieved the greatest improvement in the operating result, with an increase of €77 million. Due to a reduction in the number of flights and its optimized capacity management, the company boosted the load factor of its aircraft in the first quarter to 75.5 percent and at the same time increased its yields. The strike by Lufthansa ground staff on March 21 depressed the operating result for Lufthansa German Airlines, as did high fuel costs and the long winter, which also weighed on the other airlines in the Lufthansa Group. At the end of the first quarter 2013, Lufthansa German Airlines reported an operating loss of €292m. At SWISS, the operating result came to €-16 million, compared with €-3m in the same quarter last year. Austrian Airlines improved its operating result by €11 million to €-56 million. Overall, the operating loss for the Passenger Airline Group segment improved to €-363 million.

The Lufthansa Group also improved its operating result in the Logistics segment. Lufthansa Cargo increased its operating profit, in part thanks to targeted capacity management and lower depreciation and amortization. At the end of the first quarter, the figure for the segment was €27 million, a rise of €7 million. The operating profit for the MRO segment was up by €16 million to €81 million. Lufthansa Technik adopted some 200 individual measures as part of SCORE in the first quarter, which by 2015 are intended to improve the organization of administrative functions and align them better with customer needs. LSG SkyChefs improved its operating result by €9 million, posting an operating profit of €3 million for the period January to March. In the IT Services segment, Lufthansa Systems earned an operating profit of €3 million, compared with €4 million in the same quarter last year.

The operating profit for the Lufthansa Group in 2013 is predicted to be higher than the €524 million achieved last year, but Chief Financial Officer Simone Menne said that the positive earnings contributions from SCORE should not obscure the need for further change. “In competition with well-funded competitors, especially from the Middle East and Far East, and with low-cost airlines in Europe, we need new structures that will allow us to generate higher profits again. Putting the agreed measures into practice remains a challenge. We nevertheless intend to pursue our chosen path and shape our future with the required perseverance.”

 

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