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Lufthansa Group Reports Third Quarter Net Loss of €72 Million on 96% Increase in Revenue to €5.2 B

The Lufthansa Group has reported a third quarter net loss of €72 million on a 96 percent year-over-year increase in revenue to €5.2 billion. The Group’s Q3 adjusted EBIT excluding restructuring costs turned positive to € 272 million.

Lufthansa Group Reports Third Quarter 2021 Financial Results - Courtesy Lufthansa Group

On Wednesday (November 3, 2021), the Lufthansa Group reported their third quarter financial results for the period ending September 30, 2021. The Group reported a third quarter net loss of €72 million, compared to a net loss of €2.0 billion during Q3 2020, on a 96 percent year-over-year increase in revenue to €5.2 billion. For the first time since the onset of the global COVID-19 pandemic, the Group reported a positive third quarter Adjusted EBIT, excluding restructuring costs, of €272 million. Including restructuring costs of €255 million, the company reported a Q3 Adjusted EBIT of €17 million. At September 30, 2021, the Group had total available liquidity of €11.9 billion and pro forma liquidity of €8.5 billion.

In Wednesday’s announcement, Lufthansa’s Chairman of the Executive Board and Chief Executive Officer, Carsten Spohr, said,

“With rising demand for business travel and a record result of Lufthansa Cargo we have mastered another milestone on our way out of the crisis: We are back to black. We confirm our leading position among the world's largest airline groups. Now it is a question of continuing on the path of successful change. I would like to thank our customers for their loyalty and trust, and all Lufthansa employees around the world who are contributing with passion and dedication to mastering the current challenges.”

The Lufthansa Group continues the systematic implementation of their transformation program, with measures already taken to eliminate €2.5 billion annually, around 70 percent of their planned annual cost saving of €3.5 billion by 2024.

Lufthansa Group's Key Financial and Operational Highlights for the Third Quarter and Nine Month Period Ending September 30, 2021 - Courtesy Lufthansa Group

The volunteer programs offered in Germany for Deutsche Lufthansa AG and Lufthansa Technik AG employees have exceeded expectations, with over 3,000 team members opting to leave the Group voluntarily. Combined with fluctuation and social plans, a total of 4,000 employees have left the company voluntarily so far in 2021, and agreements have been reached with 3,000 more. Therefore, a surplus of 3,000 employees and corresponding costs currently remains in Germany. Another voluntary program for cabin crew members was launched on November 1st and will run through March 2022, which the Group believes will help reduce the staff surplus.

At September 30, 2021, the Group had approximately 107,000 employees, and the company’s goal remains to secure the long-term employment of over 100,000 team members.

During the third quarter, Lufthansa Cargo reported an Adjusted EBIT of €301 million, a new record in the history of the division for this period. Lufthansa Technik improved their Adjusted Q3 EBIT to €155 million, when excluding restructuring costs of €94 million, or €61 million with restructuring costs included. The LSG group also reported an improved result due to the positive trend in demand, especially in the American markets. LSG’s third quarter Adjusted EBIT totaled €35 million, compared to negative €74 million during Q3 2020.

Lufthansa Group’s net debt at September 30, 2021 totaled €9.0 billion, a decrease of €900 million from December 31, 2020, due to the draw-down of Silent Participation I during Q2 2021, which is accounted for as equity under IFRS. When proceeds of the capital increase and repayment of Silent Participation I is considered, the pro forma figure improves to €8.4 billion.

Commenting on the Group’s capital increase, Deutsche Lufthansa AG’s Chief Financial Officer, Remco Steenbergen, said,

“Our capital increase is an important building block in achieving our balance sheet targets by 2024 at the latest. It also enables us to complete the repayment of the stabilization measures in Germany faster than originally expected. This means that we can now fully concentrate on implementing our cost reduction programs and increasing our cash flows, as well as preparing for possible divestitures of subsidiaries.”

The Lufthansa Group expects demand to develop positively, and by the end of the third quarter new bookings had already reached approximately 80 percent of 2019 levels, including a significant increase in business travel across all ticket classes. The planned reopening of U.S. borders for fully-vaccinated travelers on November 8, 2021 has also generated a substantial increase in demand during recent weeks, with the number of weekly bookings increasing 51 percent versus previous weeks. Some of the most in-demand U.S. destinations by Lufthansa Group customers include New York, Miami, San Francisco and Los Angeles.

Source: Lufthansa Group


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