Lufthansa is coming out of the crisis faster than expected with a profit in the billions

>>iOS

Adjusted earnings before interest and taxes (EBIT) ended up at 1.5 billion euros. The management had raised its own forecast shortly before the end of the financial year, referring to the good booking situation.

Apparently nothing has changed in that regard. “The demand for air travel will continue to be high in 2023,” said CEO Spohr. Lufthansa is also sticking to its goal of achieving an adjusted profit margin of eight percent in 2024; in 2022 this was 4.6 percent.

>>Read also: Lufthansa is almost there with ITA: a binding offer has been received

However, the good result is mainly due to two divisions that do not transport people. The freight subsidiary Lufthansa Cargo achieved adjusted earnings of 1.6 billion euros. The company thus added another seven percent to the record value of the previous year. At Lufthansa Technik, a specialist in aircraft maintenance, it is 511 million euros, a significant increase of 41 percent.

The core business of passenger transport also recorded a rapid recovery in the past year, with significantly more tickets booked than expected. In addition, average yields remain high. On average, the Group’s airline brands earned 16 percent more per ticket than in the pre-crisis year of 2019.

A Lufthansa Cargo aircraft is loaded with aid supplies for Turkey

The freight subsidiary made a decisive contribution to the good result in 2022.

(Photo: dpa)

As a result, the Passenger Airlines segment was able to significantly improve its result by a good three billion euros. However, the division remained in the red with an adjusted result of minus 300 million euros. Only the brands Swiss and Austrian achieved a positive operating result. This was more than offset by the losses of the core brand Lufthansa Airlines (minus 466 million euros), Brussels Airlines (minus 74 million euros) and the offshoot Eurowings (minus 197 million euros).

And another effect may have helped the result. Personnel expenses rose by around 28 percent to 8.1 billion euros, and thus at a slower rate than sales. On the other hand, the group had to spend significantly more on fuel – not only because of higher prices, more was also flown than in 2021. This balance sheet item rose by more than 200 percent to 7.6 billion euros.

But despite such burdens, the balance sheet of the airline group is again much more solid than in the previous year. The company achieved a cash inflow (operating cash flow) of almost 5.2 billion euros from its operating business. In the previous year, the value was still 399 million euros.

Key balance sheet ratios are looking good again

This enabled Lufthansa to once again finance the necessary capital expenditure of 2.4 billion euros from its own resources. This was not yet possible in 2021. On Thursday, the supervisory board approved the executive board’s plan to order 22 long-haul jets at a list price of 7.5 billion US dollars, the equivalent of almost 7.1 billion euros.

The equity ratio shot up from 10.6 percent to an impressive 19.6 percent. Net debt fell by 24 percent to 6.9 billion euros. That is only slightly more than in the pre-crisis year 2019 (6.7 billion euros). This is where it shows how well the group has now mastered the crisis.

This also applies to the liquidity cushion. It amounts to 10.4 billion euros and is even slightly above the target corridor of eight to ten billion euros. The management had defined this as future security after experiencing the near-insolvency at the beginning of the pandemic.

On the other hand, there is no new information on the planned takeover of ITA. Negotiations with the Italian state as the owner of the airline in Rome are ongoing, the statement said.

More: Lufthansa bed rows in Economy, suite in First – that is the new cabin

source site-11