The Hamburg-headquartered company remains cautious about inflationary headwinds during the rest of 2023.
German MRO company Lufthansa Technik (LHT) saw sales rise again in the three months to March 31 as strong travel demand fed through to the maintenance market.
First-quarter revenue was up 16% year on year to €1.54 billion ($1.69 billion), of which roughly a third came from Lufthansa Group companies.
In Q1 2022, Lufthansa Group companies provided 27% of LHT’s sales. In-house work was more important this year, when Lufthansa Group plans to restore up to 90% of its pre-pandemic capacity.
Adjusted operating profit, meanwhile, rose to €135 million from €129 million in the prior-year quarter. The non-adjusted EBIT this year was almost three times higher due to impairments recorded on LHT’s Russian operations in 2022.
“The continuing strong level of demand for flights prompted a further rise in demand for maintenance and repair services with revenue and earnings accordingly increasing year-on-year,” Lufthansa Group stated, adding: “This therefore made up for the effect of the depreciation of the U.S. dollar on the earnings figure.”
It is also bullish about the rest of the year, although it cautions about inflationary headwinds.
“In the MRO business segment, revenue is expected to pick up significantly while an Adjusted EBIT figure at the same level as in the previous year is anticipated; this reflects the ongoing recovery of the MRO market together with inflation-related cost increases.”
Volume and price-related increases in the cost of materials and services, plus higher staff costs, saw operating expenses rise ahead of revenues in the first quarter, up 19% in the three months to March 31, 2023.
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