Net profits at Lufthansa
doubled for the second quarter on strong passenger numbers. The German flag carrier has also raised its guidance for 2007 on strong figures.
Net profit for the three months to June 30 totalled 438 million euros, compared with 183 million euros in the same period a year earlier.
Finance chief Stephan Gemkow told reporters on a conference call that nothing had changed in relation to Lufthansa’s interest in Iberia, which the airline has said is too expensive. Reports of interest in Spanair were simply a “rumour”, he added.
Lufthansa Group raises full-year result forecast
Lufthansa maintains its successful course: during the first six months of 2007, the Group increased its capacity and sales. The Group improved its operating result to 486 million euros, which marked an increase of 64 per cent in comparison with the first six months of 2006. The net profit for the term was reported at 992 million euros; this figure includes 503 million euros of profit from the sale of the shares in Thomas Cook.
Commenting on the first-half results, Lufthansa Chairman and CEO Wolfgang Mayrhuber said: “The result underlines the success of our strategy to continually and selectively invest in products, to place customer orientation at the fore and to keep an eye on the costs. The quality and distinct service orientation of our staff has enabled us to win over a record number of first-half customers.”
All the business segments of the Group played a role in the success, whereby the passenger business made the largest contribution. During the first half of 2007, the airlines of the Lufthansa Group welcomed 27 million passengers on board - a record figure in the Group’s history. In this case, the continued positive development on the European market deserves a special mention. The expansion of the global network of routes and the successful marketing of the betterFly offers in Germany and Europe have also paid off.
The successful result during the first half of the year also included the performance by SWISS, which was fully integrated into the Lufthansa Group on 1 July 2007. “Together we will be able to open up new markets for profitable growth even more successfully,” emphasized Mayrhuber. As of the second half of 2007, SWISS will also be included in the traffic figures of the Lufthansa Group.
Referring to the future developments, Mayrhuber underlined that: “The attractiveness of the Group will continue to grow for shareholders, customers and employees alike, as we will continue to grow in profitability, improve the quality and increase the operating margin.”
In view of the positive business development, Lufthansa is confident of increasing profitability still further and now anticipates an operating result, - in line with market expectations - significantly above one billion euros for the full financial year.
First-half figures 2007
During the first six months of 2007, the Lufthansa Group generated revenues totalling 10.1 billion euros, a year-on-year increase of 4.6 per cent. The included traffic revenue rose to 7.7 billion euros due to the increased passenger figures and the stable average yield; this was equivalent to a year-on-year rise of 4.1 per cent. The Group was also able to achieve book gains of 71 million euros through the repurchase of own stock by WAM Akquisition S.A. on 30 August 2007 that was agreed in May. The operating income increased by altogether 5.8 per cent to 10.8 billion euros.
Operating expenses rose by 3.1 per cent to 10.2 billion euros, which was proportionately lower than the level of growth. One reason for the increase in expenses was the 3.1 per cent increase in fees to 1.4 billion euros. The fuel costs remained on the same level as the previous year at 1.6 billion euros. The Group posted an increase of 83.7 per cent in profit from operating activities at 621 million euros.
Lufthansa recorded a first-half operating profit of 486 million euros, equivalent to an increase of 63.6 per cent in comparison with the same period the previous year. An improvement of 125 million euros in the financial result and the 503 million euros of profit from the sale of the shares in Thomas Cook lifted the Group’s net profit to 992 million euros. The financial result particularly reflects the positive contribution to the result made by SWISS.
The Group’s capital expenditure during the first six months totalled 852 million euros, of which 515 million euros was invested in aircraft. Operating cash flow totalled 1.1 billion euros. On 30 June 2007, the net liquidity of the Lufthansa Group totalled 703 million euros. This includes the payment that was received in April for the sale of the shares in Thomas Cook.