Lufthansa surpasses expectations: operating profit at half-way stage more than trebled

Lufthansa more than trebled its profit in the first half of 2002 compared with last year to post an operating result of EUR 332 million.

"Despite the sluggish economic climate and the aftermath of the terror attacks, we performed outstandingly and thus strengthened our leading position in international competition. Our capacity and cost management measures plus the "D-Check" programme paved the way for this success and proved to be the right approach," said Lufthansa's Chairman and CEO Jürgen Weber. 

The Group's indebtedness was also reduced appreciably in the first half-year. Good progress was also made towards putting the Catering segment back on course. Consequently, Lufthansa has upped its profit forecast and now envisages a full-year operating result of at least EUR 500 million. At the Annual General Meeting Lufthansa's top managers had anticipated a result of EUR 400 million for 2002. This new projection takes account of all identifiable risks. Should the German economy pick up in the second half of the year, the result could turn out to be even better. This is subject to the proviso, however, that the positive course of business is not impaired by any new terrorist or other global political occurrences.

The Group's revenue between January and June totalled EUR 8.2 billion, which was 4.7 per cent up on the year. Despite the still difficult operating environment, Lufthansa generated traffic revenue in the first six months totalling EUR 5.9 billion, which was 5.8 per cent less than in the same period of last year. The Group's airlines systematically adjusted their capacity to the smaller demand and thus significantly raised the rate of utilisation of their aircraft. These measures taken to optimise the network, together with the positive trend in average yields in passenger business, limited the year-on-year fall in traffic revenue. Other revenue climbed by 46.3 per cent owing to the expansion of the consolidated Group. 

Cost cuts in all business segments ensured that operating expenses grew at a slower rate. They totalled EUR 8.2 billion, which was only 3.0 per cent higher than in the first six months of 2001. Although staff costs went up by 10.2 per cent owing to the consolidation of additional companies, they would have decreased by 3.6 per cent without those consolidation changes. The cost of materials fell by 6.3 per cent, while fuel costs plummeted by 22.4 per cent. 

"Lufthansa's corporate strategy has proved correct. Quality, flexibility and cost consciousness have lastingly strengthened our profitability," Jürgen Weber pointed out. Thus the Group managed to lift its operating result by EUR 227 million to EUR 332 million. The profit from ordinary activities likewise jumped by EUR 114 million to EUR 138 million. After taxes the net result for the first half of 2002 was EUR -27 million, compared with EUR -43 million at the half-way stage last year. 

Indebtedness was reduced substantially: in the first six months net debt was slashed by EUR 1.1 billion to EUR 2.7 billion. In the wake of the crisis management measures, capital expenditure was pruned back radically compared with the normal level to only EUR 439 million (2001: EUR 2.6 billion). Hence the operating cash flow also developed positively: it rose by 59.2 per cent over twelve months.