LUFTHANSA NET PROFITS DROP ON RESTRUCTURING COSTS

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By TESTCustomwebLP TESTCustomwebLP March 13, 2014 15:19

LUFTHANSA NET PROFITS DROP ON RESTRUCTURING COSTS

Deutsche Lufthansa has reported an operating profit of €697 million for the past 12 months, from €839 million in the previous year. The company says that a comparison of the reported results is of “little informational value” since the previous year’s reported result was “largely boosted by non-recurring income from transferring operations at Austrian Airlines, while the result for 2013 was depressed by restructuring and project costs for the installation of the new Lufthansa Business Class seats”.

Lufthansa Group revenue was stable at €30.0bn (previous year: €30.1bn). At €313 million, net profit for the year, which last year also included a profit of €631 million from the sale of shares in Amadeus IT Holding, was lower, as expected (previous year: €1.2bn).

Christoph Franz, Chairman of the Executive Board and CEO of Deutsche Lufthansa AG, said: “We have strengthened the earnings power of the Lufthansa Group again last year. This is driven by the earnings performance in the passenger business, where all Airlines rose significantly. This performance trend is sustainable. It is based on a continuous improvement in the cost structure and on the billions invested in new products and services. Customer feedback here is extremely positive. This performance in our core business segment has prompted us to propose to the Annual General Meeting that a dividend of € 0.45 per share be paid.”

Lufthansa and Germanwings increased their operating profit last year to €265 million – an increase of €240 million and the most visible earnings improvement in the Group. Adjusted for restructuring costs, the increase even came to €340m. The airline stated that the transfer of European direct traffic outside the hubs in Frankfurt and Munich to Germanwings, had a “positive effect on earnings”, with the introduction of new aircraft into fleet aiding operating costs.

While the revenue per available seat-kilometre (RASK) fell slightly due to currency movements and also because of disproportionate growth in Economy Class, costs per available seat-kilometre (CASK) were reduced even faster, and so the overall result improved considerably, the airline group said.

Lufthansa Technik and LSG Sky Chefs generated operating results of €404m (previous year: €328m) and €105m (previous year: €101m) respectively, which were both the highest earnings in their corporate history. The IT Services segment also increased its operating profit from €20m in 2012 to €36m – a rise of 80%.

Effective cost management secured a positive result for Lufthansa Cargo, despite weak market demand and persistently high price pressure in the freight market. Revenue declined by 9%, but the company kept its operating margin stable. The Logistics segment generated an operating profit of € 77m (previous year: € 105m).

Group pursues restructuring undiminished and anticipates a further increase in the operating profit to between € 1.3bn and € 1.5bn in 2014.

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By TESTCustomwebLP TESTCustomwebLP March 13, 2014 15:19
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