According to preliminary figures Deutsche Lufthansa AG generated an operating profit of some 30 million euros in financial year 2003 just ended. The operating profit in the fourth quarter of 2003 thus amounted to some 180 million euros. At the same time net indebtedness was reduced by some 550 million euros to about 600 million euros. Year-end liquidity amounted to approximately 2.7 billion euros. As announced when the quarterly figures were presented last fall the capitalized goodwill in the consolidated balance sheet was subjected to a strict scrutiny. In order to remove risks from the balance sheet that are predictable from today’s point of view extraordinary amortizations of goodwill and depreciations of fixed assets amounting to a total of 800 million euros were effected for the year 2003 of which some 700 million euros were accounted for by the LSG Sky Chefs Group. Lufthansa therefore reports a net loss of approximately 980 million euros. Against this background the Executive Board will not propose the payment of any dividend for financial year 2003.
The amortizations effected in the 2003 annual financial statements do not affect liquidity and will therefore impair neither the operational business nor the future perspectives of the group.
Recovery of demand visible in first quarter 2004 The data available for the first quarter of 2004 so far show a more positive development than in the previous year. This applies especially to intercontinental routes. As a result, both an increase in the seat capacity offered and the addition of new routes are being planned for the summer schedule after the significant declines caused by the crisis last year. Above all, the traffic region of Asia will be further developed. The stagnating continental traffic still does not show any signs of recovery. Programs to cut costs, improve efficiency and promote product differentiation are being consistently pursued to achieve sustainable and profitable growth. The restructuring measures required for the turnaround of the Business segment Catering have been initiated. The LSG Sky Chefs Group had been hit particularly severely by the decline of business in the USA. More than 8,000 jobs have already been made redundant, several operations have been closed and the organizational structures have been made significantly leaner. Further cost reductions of 150 million euros have been identified and are being implemented. Lufthansa is currently conducting negotiations on the sale of the Chef Solutions division that offers prepared food for supermarkets and restaurants in the USA.
Active portfolio management continued Lufthansa’s active portfolio management is being continued to strengthen the group. After the sales of GlobeGround and DHL Lufthansa used the currently favorable capital market conditions two weeks ago by divesting 13.2% of its shares in Amadeus which produced a book profit of around 290 million euros.
“After the massive declines in world aviation since 9/11 the Lufthansa Group - thanks to its high level of responsiveness - has a stronger position in international competition today and will be among the winners in this process of change in the airline industry. Our above average financial power, our strict cost management and our strong operational business performance make possible a sustainable consolidated balance sheet adjustment as well as simultaneous investment in innovative products and the consistent utilization of growth opportunities in a recovering market,” says Wolfgang Mayrhuber, Chairman and CEO of Deutsche Lufthansa AG.
Details on the financial year just ended will be elaborated at the annual press conference in Frankfurt on 25 March 2004.