Lufthansa Posts Profit In Q2, Updates FY22 EBIT View; Stock Up

Shares of Deutsche Lufthansa AG were gaining around 6 percent in the morning trading after the German flag carrier reported Thursday a profit in its second quarter, compared to last year’s loss, benefited by surge in demand.

Looking ahead, Lufthansa projects further significant increase in adjusted EBIT in the third quarter compared to the second quarter, primarily due to a continued improvement in the results of Passenger Airlines.

The company also specified its outlook for the year, and now expects adjusted EBIT to be above 500 million euros for the full year of 2022, in line with current market expectations.

The previous forecast for the full year was an improvement in adjusted EBIT compared to the previous year.

For fiscal year 2021, adjusted EBIT, the company’s key performance indicator, was a loss of 2.35 billion euros.

The company expects demand for tickets to remain high for the remaining months of the year. Bookings for the months August to December 2022 are currently at an average of 83 percent of the pre-crisis level.

In addition, Lufthansa noted that it would hire about 5,000 new employees in the second half year of 2022, owing to rapid increase in air traffic worldwide, in line with its ramp-up plan. A similar number of new hires is planned in 2023.

Remco Steenbergen, Chief Financial Officer, said, “… Also in the full year 2022, thanks to the expected return to positive results, strict working capital management and disciplined investment activities, we forecast a clearly positive Adjusted free cash flow and thus a reduction in our net debt compared to the prior year.”

For the second quarter, the company generated net income of 259 million euros, compared to a net loss of 756 million euros last year. Earnings per share were 0.22 euros, versus loss per share of 1.26 euros last year.

The Group’s adjusted EBIT for the quarter was at 393 million euros, compared to negative adjusted EBIT of 827 million euros a year ago. The adjusted EBIT margin rose accordingly to 4.6 percent versus negative 25.8 percent last year.

According to the company, strong increase in average yields and successful cargo segment drive positive quarterly result. Meanwhile, its result were impacted by irregularity cost in relation to disruptions in the flight operations.

For the second quarter, Lufthansa generated a turnover of about 8.46 billion euros, almost three times compared to last year’s 3.2 billion euros. In the second quarter, about 29 million passengers flew with the Group’s airlines. This compares to last year’s 7 million passengers.

Despite the higher price level, Lufthansa Group’s flights had an average load factor of 80 percent in the second quarter, almost as high as before the Corona pandemic.

Unit costs at the passenger airlines fell 33 percent thanks to ongoing and consistent cost management and the expansion of flight capacity.

In Germany, Lufthansa shares were trading at 6.45 euros, up 6.1 percent.

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