Lufthansa Q1 earnings grounded despite soaring cargo revenues

German airline group posted a net loss of 68 million euros (U.S. $74.2 million) for the first quarter of 2017 compared with an EUR 8 million loss last year, even as revenues in its logistics division surged 18.5 percent from the same 2016 period.    German airline group Deutsche Lufthansa AG posted a net loss of 68 million euros (U.S. $74.2 million) for the first quarter of 2017 compared with an EUR 8 million loss last year despite soaring cargo revenues, according to the company’s most recent financial statements.
   Lufthansa reported a loss per share (EPS) of EUR 0.15 for the quarter compared with a loss of EUR 0.02 per share in first quarter 2016, even as revenues in the group’s logistics division surged 18.5 percent year-over-year to EUR 569 million.
   The division, which includes Lufthansa Cargo, reported earnings before interest and taxes (EBIT) of EUR 33 million compared with an EUR 19 million loss in first quarter of 2016.
   The company attributed the strong logistics results primarily to a “good recovery in cargo demand and the first successes of its cost reduction program.”
   Overall revenues at Lufthansa increased 11.2 percent year-over-year to EUR 7.69 billion for the quarter.
   “For a period that is traditionally difficult for the airline industry, we have posted our first positive earnings result since 2008,” Deutsche Lufthansa AG Chief Financial Officer Ulrik Svensson said of the results. “This is mainly attributable to favorable trends at Lufthansa Cargo and strong growth at Lufthansa Technik. This demonstrates the strength of our broad setup as aviation group.
   “At our airlines, we are seeing positive developments in the pricing environment and significantly higher traffic revenues,” he added. “At the same time, however, we cannot be satisfied with the cost development of our airlines. So we will continue to keep a clear and consistent focus on cost. Our positive earnings development in the first quarter was boosted by non-operating results. It is important that even without these, we would still have reported an improved first-quarter result.”
   Looking ahead to the rest of 2017, the Lufthansa Group is projecting “substantially” higher revenues, but an adjusted EBIT slightly below 2016 levels.
   “Despite our strong first-quarter results and the good forward bookings at our airlines, our full year guidance for 2017 remains unchanged,” said Svensson. “At our airlines, we do not yet have a sufficient visibility on the bookings in the important third quarter.”