Lufthansa Q3 Net Loss Narrows, Sees Positive EBITDA In Q4, Backs FY21 View; Stock Up

Shares of Deutsche Lufthansa AG were gaining around 6 percent in German trading after the airline issued positive EBITDA outlook for the fourth quarter, and maintained fiscal 2021 view. This was following significantly narrower net loss in its third quarter with strong demand.

Lufthansa said it generated an operating profit in the third quarter for the first time since the beginning of the pandemic crisis, despite high restructuring expenses weighing on the result. The results reflected rising demand for business travel and strong results of Lufthansa Cargo.

New bookings increased significantly, supported by the further opening of important long-haul markets for travelers from Europe, especially the US. At present, new bookings have reached around 80 percent of the pre-crisis level.

Going ahead, Lufthansa Group expects demand to develop positively.

For the fourth quarter of 2021, Group EBITDA is expected to be positive, even assuming restructuring expenses of around 80 million euros.

For the full year 2021, Lufthansa Group continues to expect a year-on-year increase in Group revenue and to reduce the Adjusted EBIT loss to less than half of prior year.

The company continues to expect capacity, measured in available seat-kilometers or ASK, of around 60 percent of the pre-crisis level in 2019 for the fourth quarter, confirming its capacity expectation of around 40 percent of the pre-crisis level for the full year 2021.

For the first quarter of 2022, it targets capacity of around 65 percent of the level in 2019 and expected to increase to around 80 percent in the summer and second half of the year.

Therefore, for the full year 2022, the company expects a capacity of more than 70 per cent compared to 2019.

For the third quarter, net loss narrowed significantly to 72 million euros from 1.97 billion euros in the same quarter last year. On a per share basis, net loss was 0.15 euros compared to a loss of 3.80 euros in the previous year.

Quarterly adjusted EBIT, including restructuring expenses, was 17 million euros compared to negative 1.26 billion euros in the prior year. Excluding restructuring costs, adjusted EBIT was 272 million euros compared to negative 1.2 billion euros in the previous year.

At Lufthansa Cargo, adjusted EBIT was at 301 million euros, compared to prior year’s 169 million euros.

Group sales for the third quarter surged 96 percent to 5.21 billion euros from 2.66 billion euros last year. Traffic revenue climbed 122 percent from last year to 3.91 billion euros.

In the third quarter of 2021, capacity offered, measured in passenger-kilometers, was 50 percent of the pre-crisis level of 2019, about twice as high as in the second quarter.

Overall, the airlines of the Lufthansa Group carried 19.6 million passengers in the quarter, which represents 46 percent of the pre-crisis level in Q3 2019.

The seat load factor was 68.8 percent, 17.4 percentage points higher than in the preceding second quarter, while it was down 17.5 percentage points compared to the third quarter of fiscal 2019.

In Germany, Deutsche Lufthansa shares were trading at 6.25 euros, up 5.97 percent.

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