MTU Aero Engines issues higher and more concrete forecast at half-year

MTU Aero Engines generated revenues of €2,148.6 million in the first six months of 2018, up 9 % on the previous year (1-6/17: €1,977.0 million). The group’s operating profit increased by 13% from €296.3 million to €334.6 million, resulting in an EBIT margin increase from 15.0% to 15.6%. Earnings after tax also increased by 13% to €237.0 million (1-6/17: €210.1 million).

MTU recorded the highest revenue growth in the first six months in the commercial engine business. Revenues grew by 15% from €643.2 million to €738.9 million. The V2500 engine for the A320 and the GEnx for the Boeing 787 and 747-8 accounted for the greatest share of these revenues.

In the commercial MRO business, revenues rose by 9% to €1,288.5 million (1-6/17: €1,181.0 million). “In U.S.-dollar terms, the increase in revenues was, at 22%, far more pronounced and once again demonstrates the high demand for maintenance services. We are meeting this demand both by expanding and adding to the portfolio of our worldwide MRO locations,” Kameritsch added. The main revenue driver in the commercial maintenance segment was the V2500.

At €15.5 billion, the order backlog reached a new record level at the end of June 2018 (December 31, 2017: €14.9 billion). Most of these orders relate to the V2500 and to the Geared Turbofan™ engines of the PW1000G family, foremost among them the PW1100G-JM for the A320neo.

In the OEM business, MTU increased its half-year earnings by 19% from €192.3 million to €228.9 million. The EBIT margin rose from 22.8% to 24.4%. In the MRO segment earnings increased to €105.5 million, after €103.7 million in the comparative period. The EBIT margin in this segment amounted to 8.2% (1-6/17: 8.8%).

“In the first half of the year, the commercial spare parts and commercial MRO business in particular developed better than expected,” said Reiner Winkler, CEO of MTU Aero Engines AG. “We are expecting this trend to continue and are therefore able to substantiate and at the same time raise our forecast today.” MTU anticipates that its commercial spare parts business will see organic growth of around 10% in 2018. So far, the company had projected a mid-single-digit increase. In the commercial maintenance business, revenues expressed in U.S. dollars are forecast to increase by around 20%. Initially, MTU had anticipated a growth rate in the high teens. The outlook for the other segments remains unchanged, with the commercial series production business looking set to achieve the highest organic growth with around 30%. MTU expects revenues from military business to be at the 2017 level.

“Overall, group revenues should reach around €4.2 billion in 2018, slightly higher than previously assumed,” said Winkler.