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Lufthansa Group profitable in difficult environment

Lufthansa Group profitable in difficult environment

According to last year’s preliminary consolidated financial statements, Lufthansa Group posted revenues totalling 30.1 billion euros (+4.9 per cent) and generated an operating profit of 524 million euros (-36.1 per cent) in 2012. The Group had forecast an operating profit for 2012 in the mid-three digit million euro range. The operating result contains restructuring costs arising from measures taken in the SCORE Change for Success programme. In 2012 these amounted to 160 million euros. The partial transfer of Austrian Airlines’ flight operations to Tyrolean Airways had a positive one-off effect of 115 million euros on the operating result.

Commenting on the preliminary results, CEO and Chairman of the Board of Lufthansa AG Christoph Franz said: “Profitability for an airline is not simply a given in the present industry environment, it is a good performance. In order to successfully meet the changes in the aviation industry, however, we need to perform even better. Only then can we create the necessary scope for the measures we need to take to shape the future of the Lufthansa Group ourselves. A net profit driven by one-off effects must not mislead us into disregarding the pressure to act.” Group net profit in the 2012 business year rose from minus 13 million euros in 2011 to 990 million euros. The increase is attributable to non-recurring effects ensuing from the sale of equity investments.

In light of the decreasing operating result again as well as the ongoing extensive restructuring process, the Executive Board proposes to the Supervisory Board to suspend the dividend payment. “Our aim is to allow our shareholders to participate sustainably in the Group’s future success.  Our SCORE Change for Success programme will contribute positively to this objective. It is now all the more important to invest all available resources in the Group in order to drive that future programme forward“ emphasised Chairman Franz.

The Group net profit will consequently be retained in full for the purpose of strengthening equity capital, especially in view of the negative effects of the newly formulated IAS19 Standard concerning “employee benefits”. The new standard is to be applied for the first time in 2013.