Rising revenue with simultaneous decline in EBIT
Lufthansa Technik, a subsidiary of the Lufthansa Group, generates a profit in the three-digit million range in the first quarter of 2024. The company was already able to achieve such an amount in 2023, making it the global market leader in aircraft maintenance, repair and overhaul (MRO).
Dr. William Willms, CFO of Lufthansa Technik, emphasizes: “Of course, we are pleased to have earned more than 100 million euros again in the first quarter of 2024. Ultimately, however, it should be noted that our adjusted EBIT fell by 14% compared to the same period last year, despite significant revenue growth.”
The aim is to reach the previous year’s level for the year as a whole.
Lower EBIT due to strikes in Germany
According to the information provided, the results are nevertheless slightly lower than forecast with EBIT of 116 million euros. Last year, EBIT amounted to 135 million euros. This is due in particular to the strikes in Germany in recent months, which have also affected air traffic. In addition, there were material bottlenecks and disproportionately high cost increases.
In the first quarter, turnover amounted to 1.8 billion euros, which is 15 percent higher than in the same period of the previous year.
The EBIT margin is 6.6%, the target was 10%. In 2023, this was 8.8%.
2,000 new employees per year
Lufthansa Technik reports that it signed more than 1,000 new contracts last year and generated 8 billion euros in new business. In the first quarter of the current year, 174 contracts have already been signed, according to the company.
The number of employees is also rising steadily. At the end of March 2024, Lufthansa Technik had 23,000 employees. The company has been able to hire 2,000 new employees within a year. This is a sign of the company’s attractiveness. The number of employees is also expected to grow by four digits in 2024. However, rising personnel costs are a particularly important issue in Germany.
“The agreement reached with the trade union in the latest collective bargaining negotiations for our employees in Germany was good news,” explains Willms. According to him, the long-term influence of salaries on the cost structure will also have a major impact. Lufthansa Technik must work efficiently to counteract this.
Source: www.kloepfel-consulting.com