MTU Aero Engines dampens profit outlook
MTU Aero Engines AG increased its revenues by 19 % to € 1,852.2 million in the first six months of 2013. Operating profit for the period came to € 171.7 million (down from € 175.8 million).
“Our commercial series business registered strong growth in the first half year as planned. It is of vital importance to MTU’s future growth, but it initially cushions the earnings development. At present, the spare parts business is unable to fully counterbalance, because sales have been lower than expected in certain programs. Moreover, business in the industrial gas turbine sector is stagnant,” explained Egon Behle, CEO of MTU Aero Engines AG.
“We expect to see only a moderate improvement of this trend in the second half of the year and have therefore decided to specify our full-year revenue estimate and to revise our earnings guidance.” MTU now expects to generate revenues of around € 3.7 billion in 2013, in line with its earlier forecast of an increase of between 10 and 12 % (group revenues 2012: € 3,378.6 million).
MTU’s earnings guidance now foresees an operating profit (adjusted EBIT) of around € 375 million, i.e. on the level of last year (2012: € 374.3 million), and an adjusted net income of around € 235 million (2012: € 233.4 million). Until now, each of these two figures had been expected to increase by 10 to 12 %.
The rise in first-half revenues is mainly attributable to strong growth in the commercial engine business, where revenues increased by 36 % from € 703.0 million to € 953.6 million. The key revenue drivers were the V2500 engine for the Airbus A320, the GP7000 deployed in the Airbus A380, and the GEnx that powers the Boeing 787 Dreamliner and the Boeing 747-8.
MTU’s commercial maintenance business saw its revenues grow by 8 % to € 691.1 million (1-6/2012: € 641.2 million). The main source of these revenues was the V2500 engine. Stagnating revenues in the industrial gas turbine business reflect the present low level of energy prices.
As expected, MTU’s revenues in the military engine business remained at the previous year’s level and amounted to € 223.2 million compared with € 230.6 million in the first six months of 2012. The EJ200 Eurofighter engine accounted for the largest share of these revenues.
Research and development expenditure for the six-month period, at € 95.7 million prior to recognition of capitalized development costs, was lower than in 2012 (1-6/2012: € 118.0 million). Company-funded R&D expenditure recognized as expense also decreased by 13 % from € 53.5 million to € 46.5 million. “The geared turbofan™ technology, which is the focus of our R&D activities, is approaching maturity. As expected, our R&D expenditure has therefore diminished,” explained Behle.
The size of the workforce has barely changed since the end of 2012. At June 30, 2013, the number of MTU employees came to 8,577, compared with 8,541 six months earlier.