Tangible Improvements in Key Financial Indicators

Net profit for the first half of 2017 amounted to EUR 672 million, a 56.6 per cent improvement on the prior-year period (prior year: EUR 429 million). Cash flow from operating activities rose more than EUR 1 billion to EUR 3.2 billion. The increase was driven by the good result and more advance bookings for the third-quarter period. With capital expenditure basically unchanged at EUR 1.2 billion, free cash flow rose by 87.0 per cent to EUR 2.1 billion (prior year: EUR 1.1 billion). Net financial debt was reduced by more than half – 57.8 per cent – to EUR 1.1 billion (year-end 2016: EUR 2.7 billion). Pension obligations stood at EUR 8.1 billion as of 30 June 2017, some EUR 200 million below year-end 2016. The special contribution of EUR 1.6 billion into the new defined contribution pension scheme for the flight attendants of Lufthansa will now start in the third quarter and will continue in various installments until the end of the year.

“Our key financial performance indicators have been significantly improved further,” Ulrik Svensson confirms. “Our free cash flow has almost doubled, and our net financial debt has been more than halved. Higher revenues and lower costs have enabled us to soundly finance the investments required for new aircraft and an attractive product. All of which is vitally important in keeping our company the number one in Europe.”

The Network Airlines of the Lufthansa Group raised their total first half year revenues by just under EUR 700 million to EUR 11.1 billion, thanks to stronger demand in all traffic regions. The Network Airlines reported an Adjusted EBIT of EUR 757 million for the period (prior year: EUR 487 million). All airlines have lowered their unit cost compared to the same period last year. Lufthansa German Airlines and Austrian Airlines also saw their unit revenues increase.

Lufthansa German Airlines achieved a first half year Adjusted EBIT of EUR 569 million (prior year: EUR 361 million). SWISS more than offset a decline in yields with a substantial increase in sales, and raised its Adjusted EBIT for the period to EUR 187 million (prior year: EUR 127 million). Austrian Airlines improved its first half-year Adjusted EBIT to EUR 3 million (prior year: EUR -1 million).

Lufthansa Cargo raised its constant currency yield by 9.3 per cent, thanks to favourable trends in demand. The company reported a positive Adjusted EBIT for both the first and the second quarter, resulting in first half year earnings of EUR 78 million (prior year: EUR -45 million). Lufthansa Technik improved its first half year Adjusted EBIT by 8.8 per cent to EUR 222 million (prior year: EUR 204 million).

The LSG Group achieved an Adjusted EBIT of EUR 13 million for the first half-year period (prior year: EUR 24 million). The decline is primarily attributable to restructuring costs.
First half-year Adjusted EBIT for Additional Businesses and Group Functions amounted to EUR 41 million (prior year: EUR -50 million). The improvement was predominantly due to currency effects. “In view of our successful first half-year development and the better visibility into the important third-quarter period, we have raised our forecast for 2017,” says Ulrik Svensson.

At the passenger airlines, the organic capacity growth in the second half-year is expected to be 4.7 per cent. From today’s perspective, unit revenues at constant currency will be negative in the second half-year compared to the prior-year period. They are, however, expected to perform better than this in the third quarter. Unit costs excluding fuel and currency effects are expected to come down slightly in the second half-year. The Lufthansa Group forecasts an Adjusted EBIT for 2017 above previous year. Fuel cost excluding Brussels Airlines for the second half of the year are projected EUR 100 million below the previous year.