Lufthansa Group in 2016: Gross profit adjusted by 1,75 billion
Adjusted gross profit reached 1,75 billion, a result close to 2015 and in line with financial estimates for 2016!
In 2016, Lufthansa Group recorded total revenue of 31,7 billion, down 1,2% from the previous year. According to expectations, the value of the earnings, before deducting the cost of 100 of millions of euros generated by strikes to the employees of 2016, was similar to that of the previous year.
The company's gross profit reached 2,3 billion, a significant increase of 599 million compared to the previous year. At the same time, the adjusted gross profit reported by the group reached 1,75 billion, with 3,6% less than in 2015. The adjusted gross profit margin for 2016 was 5,5%, a slight decrease of 0,2%.
Adjusted gross profit of 1,75 billion
The difference between gross profit and adjusted gross profit is largely attributable to the collective labor agreement between Lufthansa and its flight personnel within the UFO (Independent Flight Accompanying Organization).
The change, agreed upon, from a fixed-value pension system to one based on defined contributions had a positive impact of 652 of millions of euros on gross profit, which is not, however, taken into account in defining the value of the profit. adjusted gross.
Independent of this change, Lufthansa consolidated its financial position last year, obtaining a 2,5% reduction in cost per unit, excluding fuel costs and exchange rate fluctuations.
Lufthansa Group has invested 2,2 billion in 2016, with about 300 million less than planned. Thus, the total value of the investments decreased by 13% compared to the previous year, largely due to delays in the delivery of new aircraft. As a result, the available cash flow increased by 36,5% to a total of 1,2 billion.
The net debt ratio decreased significantly by 19%. According to earnings after deducting capital costs, Lufthansa Group earned 827 million in 2016 revenue.
Lufthansa Group's airline division exceeded favorable results from 2015, reporting adjusted gross profit of over 1,5 billion in 2016. The adjusted gross profit margin was 6,4%.
Lufthansa's profit increased by 254 million, to over 1,1 billion, while Austrian Airlines also contributed to revenue growth, with a gross adjusted profit of 58 million (increasing by 6 million compared to from the previous year).
SWISS remains the most profitable airline of the group
Although revenues were slightly below 2015, SWISS remains the most profitable airline of the group, with a gross profit margin adjusted by 9,3%.
Eurowings reported a negative adjusted gross profit of -91 million, and over half of the losses are due to the start-up expenses and other single expenses.
The organic capacity growth of the airlines will be approximately 4,5% in 2017. The earnings will be positively influenced by the recent acquisition of Brussels Airlines, whose results will be fully consolidated only in 2017, as well as by the agreement signed with Air Berlin.
In March 2017, Lufthansa and the pilot union Vereinigung Cockpit (VC) concluded an agreement that is valid until 2022 and includes solutions on last-minute negotiations on transitional payments, the pension plan, the terms of the employment contract and the salaries of Lufthansa pilots. , Lufthansa Cargo and Germanwings. Thus, until 2022, 325 Lufthansa aircraft will be operated by pilots who benefit from the new collective labor agreement.
Locally, starting March 27, Lufthansa increased the frequency of flights on the Sibiu-Munich route, thus operating up to 3 flights per day, respectively up to 19 flights per week, compared to 14 previously.