April 30, 2024 06:58 GMT
Lufthansa (LHAGR; Baa3, BBB-, BBB-; S) {LHA GY Equity} 1Q Results
CONSUMER CYCLICALS
Profit warning 2-weeks ago already gave the headline numbers & revised FY24 guidance of FCF >€1b (prev. >€1.5b) on flat capex yoy (& EBIT of €2.2b (prev. €2.7b). New items for us below, we have been cautious on network carriers on the back of recent compression - markets reversed some of profit warning widening last week. Will be interested to see moves today.
- As reminder even net of €350m in strike cost, 1Q EBIT would have missed last years -€273m loss by over €200m on lower cargo revenues. Adj. FCF was firmer €305 (€482m last yr) boosted on un-flown tickets (+€2.3b).
- 2Q isn't expected to see a recovery; 92% of '19 capacity, RASK decline yoy & CASK increase. Adj. EBIT is expected to be down yoy - consensus is just north of €1b currently vs. last yrs €1.08b - might see revisions down on that.
- Its 80% hedged this year on Fuel, at $937/t with expected fuel expense at €8.3b (c€8b) - we see spot at low 800s currently.
- LTM leverage at 1.8x (from 1.7x last qtr) with net debt of €8b including €2.4b in pension liabilities. No issues in liquidity with cash on hand of €8.3b & a renewed & increased €2.5b revolver. Maturity profile is relatively front-loaded including €1b due across 2 € lines this year.
- Reminder annual dividend restarted at €0.3/share; €360m total or 21% pay-out on net income.
Earnings call at 10:30am London; https://event.choruscall.com/mediaframe/webcast.ht...
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