German MTU Aero Engines reports 13-pct rise of revenues in Q1

Source: Xinhua | 2020-05-01

German aircraft engine manufacturer MTU Aero Engines reported on Thursday that its revenues in the first quarter (Q1) of 2020 rose by 13 percent year-on-year to around 1.3 billion euros (1.41 billion U.S. dollars).

"Although the decline in demand as a result of the coronavirus pandemic is not yet reflected in the quarterly figures and capacity utilization remained high at our worldwide MRO (maintenance, repair and overhaul) locations, the first quarter was nevertheless affected by the coronavirus crisis," said Reiner Winkler, chief executive officer (CEO) of MTU Aero Engines.

While the adjusted EBIT (earnings before interest and taxes) margin still stood at 14.3 percent, 2.3 percentage points lower than in Q1 2019, the company's operating profit declined by three percent to 181.8 million euros, according to MTU Aero Engines.

The highest revenue growth for MTU was recorded in the commercial maintenance business, where revenues rose by 21 percent to 794.9 million euros. All divisions combined, MTU recorded an order backlog at the end of Q1 of 19.4 billion euros.

According to MTU, free cash flow was at a "normal level" of 68.7 million euros. Winkler said that MTU focused on "reducing expenditure at all MTU locations, postponing capital expenditure and discussing payment modalities with partners and suppliers."

MTU announced its intention to extend its existing credit line and add new credit facilities. "Naturally, in the present situation we are looking carefully at measures to safeguard liquidity," Winkler explained.

Since the coronavirus crisis became "significantly more marked in March," MTU decided to suspend the dividend, postpone its annual general meeting, suspend operations at its facilities in Germany and Poland for three weeks, and withdraw its guidance for the financial year.

"Given the dynamic global developments in connection with COVID-19, our expectations for the 2020 fiscal year can only be set out in detail at a later date," said Winker, stressing that MTU is "in a good position to weather the crisis."