Lufthansa Cargo Q2 adjusted EBIT drops 92%
Revenue down 43% to €712mn, revenue cargo tonne kilometres dropped 20% to 2.2 billion vs 2019
Lufthansa Cargo reported a 43 percent decline in total revenue at €712 million for the second quarter of 2023 compared to €1.3 billion in Q2022 on normalisation in global freight rates.
Adjusted EBIT dropped 92 percent to €37 million from €482 million in the second quarter of 2022, says an official release.
"Despite lower demand, however, Lufthansa Cargo's average yields remained a good 40 percent above the pre-crisis level of 2019, meaning that Lufthansa Cargo again outperformed the market as a whole in the second quarter. Freight capacity in the second quarter was six percent up on the previous year, mainly due to the recovery in passenger flight operations and the associated expansion of belly capacities."
Lufthansa Cargo thus gained market share in the second quarter, the release added. In the first half-year, adjusted EBIT came to €188 million (previous year: €977 million) as revenue dropped 37 percent to €1.5 billion from €2.4 billion in H12022.
While available cargo tonne kilometres declined 15 percent to 3.8 billion in Q22023, revenue cargo tonne kilometres dropped 20 percent to 2.2 billion compared to 2019. YoY, capacity was up nine percent and revenue tonne kilometres increased two percent.
Group revenue up 17%
Lufthansa Group revenue in the second quarter was up 17 percent at €9.4 billion compared to €8 billion in Q22022. The operating result (adjusted EBIT) increased to €1.1 billion, up almost triple from previous year (€392 million). "This corresponds to an operating margin of 11.6 percent and is a new record for a second quarter result at the Lufthansa Group. Net income also marked a new high of €881 million (previous year: €259 million)."
Carsten Spohr, CEO, Lufthansa Group
Carsten Spohr, CEO, Lufthansa Group says: "Thanks to the great efforts of our employees, we were able to avoid a situation like last summer and once again offer our customers a more stable operation. Whether on the ground, in the cockpit, in the cabin or in our maintenance hangars, it was our employees worldwide who made reliable flight operations and the financially best second quarter in our history possible. Thus, our clear focus on stability has proven to be the right choice for our customers, our employees and our shareholders. Besides that, we have sharpened our strategic focus with agreements on the sale of LSG Group and AirPlus as well as the agreement to acquire ITA.
"Our outlook indicates a continued positive development for customers, employees and shareholders. The specified profit forecast clearly shows that we are well on track to achieve the financial targets we have set ourselves for the medium term. This enables us to make the planned investments in premium quality for our customers. The simultaneous continuation of our recruitment campaign with more than 1,000 new hires per month also creates new prospects for our employees. And last but not least, there is a special outlook for our Lufthansa long-haul fleet. Two more A380s will return to scheduled service this year, with more to follow along with new Boeing 787s and Airbus A350s in the coming year, into which we look with great optimism.”
The group had access to liquidity totaling €10.8 billion at the end of June 2023 (31 December 2022: €10.4 billion), the release added.
Successful portfolio measures in Q2
The Lufthansa Group continued its transformation into an airline group . Three significant transactions were carried out within just three months between April and June.
"In April, the sale of the LSG group's remaining international catering business to the private equity company AURELIUS was announced. The sale of the payment services provider AirPlus to SEB Kort, which was announced in June, also marks an important step in the Lufthansa Group's focus on its core business.
"In addition to the sales of the two aforementioned parts of the company, the acquisition of a minority share of 41 percent in the Italian airline ITA Airways was agreed in May. The contract stipulates that Lufthansa can also take over the remaining shares in ITA at a later date. The acquisition of the minority stake in ITA Airways is subject to approval by the relevant authorities, which is expected by the end of the year."
2023 outlook
Due to the strong outlook for the second half of the year, the group now expects to achieve an adjusted EBIT of more than €2.6 billion (significant increase compared to the previous year's €1.5 billion). "The result is thus expected to be one of the three best in the history of the Lufthansa Group. According to the company’s assessment, this specified forecast is in line with current market expectations."
