Lufthansa shares plunge on first-quarter loss

GMT 09:37 2016 Tuesday ,03 May

Arab Today, arab today Lufthansa shares plunge on first-quarter loss

Lufthansa says it booked a net loss of 8.0 million euros ($9.2 million)
Frankfurt - AFP

Lufthansa shares nosedived on Tuesday after the German airline said one-off effects and price pressures pushed it into a loss in the first three months of the year.

Lufthansa shares were among the biggest losers in morning trade on the Frankfurt stock exchange, shedding nearly six percent in a market that was down by around 1.4 percent. 

Lufthansa said in a statement that it booked a net loss of 8.0 million euros ($9.2 million) in the period from January to March, compared with a profit of 425 million euros a year earlier.

But the airline pointed out that the year-earlier figure had been boosted by one-off financial gains. 

At an underlying level, earnings before interest and tax (EBIT) showed a loss of 49 million euros, compared with a much deeper loss of 144 million euros a year earlier. 

First-quarter revenues slipped by 0.8 percent to 6.92 billion euros.

"We have seen a solid start into the new business year," said chief financial officer, Simone Menne.

The airline is also benefitting from further fuel cost reductions, she said.

"We are seeing significant pricing pressure at our passenger airlines, and even more at Lufthansa Cargo. But the substantial unit cost reduction at our passenger airlines has more than made up for the pricing declines," Menne said.

Lufthansa said it did not expect to see any easing of the pricing pressures in the passenger and cargo transport sectors.

"The trends we have seen in the last few months are likely to continue throughout the present quarter," said Menne.

"The intensity of the competition and the resulting pricing pressures will not ease. This is why it is important that we continue to work consistently on our cost positions," she said.

Looking ahead to the full year, Lufthansa said its forecasts remained unchanged.

"We expect to achieve an adjusted EBIT slightly above the previous year result of 1.8 billion euros," the company said.

"This forecast does not, however, include the negative result impacts of possible strike actions."

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