Lufthansa Group (DLAKF,DLAKY) on Tuesday reported slightly higher profit in its first half, despite weak margin and broadly flat revenues. Looking ahead, for fiscal 2018, the German airline confirmed outlook for slightly lower earnings, but lifted revenue forecast. The shares were gaining around 8 percent in the German trading.
Group CFO Ulrik Svensson confirmed, “With continuing strong demand, we are confident that, despite a challenging prior-year basis for comparison, we will be able to report solid revenue trends for the second half of 2018, too.”
For fiscal 2018, Lufthansa continues to expect an adjusted EBIT that is only slightly below 2017’s record level. The company now expects a slight increase in unit revenues for the full year. The company previously expected a stable development of unit revenues excluding currency factors.
Full-year capacity is now expected to increase by around 8 percent, slightly less than the earlier forecast of 8.5 percent growth.
For the first half, net income edged up to 677 million euros from prior year’s 672 million euros.
Adjusted EBIT, the key profit metric of Lufthansa Group, was 1.008 billion euros, slightly lower than last year. Adjusted EBIT margin amounted to 6.0 percent, compared to 6.1 percent in 2017 amid substantially higher fuel costs.
Total first half-year revenues amounted to 16.9 billion euros, broadly in line with the prior-year level. Excluding the impact of the first-time application of the IFRS 15 accounting standard, revenues increased 5.2 percent.
Traffic revenue totaled 13.2 billion euros, which, excluding the first-time impact of IFRS 15, represents an increase of 7 percent.
The company noted that Network Airlines and Eurowings grew unit revenues while significantly expanding capacity.
Lufthansa noted that 67 million passengers were carried, a new record for the period. Capacity, volumes sold and seat load factor were also all at new record highs.
In Germany, Lufthansa shares were trading 24 euros, up 8.25 percent.
by RTTNews Staff Writer
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