COLOGNE (dpa-AFX) - Shares of Deutsche Lufthansa AG (DLAKF, DLAKY) were losing around 6 percent in German trading after the airline reported Tuesday weak earnings in its second quarter, despite higher revenues. The earnings were hurt by price wars on short haul routes, as well as rising costs. Further, the company confirmed its forecast for fiscal 2019.
Ulrik Svensson, CFO of Deutsche Lufthansa, said, 'Our earnings are feeling the effects of tough competition in Europe and sizeable overcapacities, especially on our short-haul routes out of Germany and Austria. We are responding to this by further reducing our costs and increasing our flexibility.'
Meanwhile, long-haul business recorded continuing strong performance particularly on its key North American and Asian routes.
For the second quarter, net profit to shareholders was 226 million euros or 0.48 euro per share, down from 752 million euros or 1.59 euros per share in the prior year.
Adjusted EBIT was at 754 million euros compared to 1 billion euros, a year ago. The adjusted EBIT margin was 7.8 percent compared to 10.8 percent last year.
The company noted that fuel costs alone were 255 million euros higher in the latest quarter than in the previous year.
Total revenue were 9.63 billion euros, 4 percent higher than 9.30 billion euros in the previous year.
Looking ahead, Lufthansa Group continues to expect a low single-digit percentage increase in total revenues and an adjusted EBIT margin of 5.5 to 6.5 percent for the full year 2019.
The company expects the European market to remain challenging until at least the end of the current year.
The Network Airlines would report an adjusted EBIT margin of between 7 and 9 percent for 2019 as a whole, while Eurowings would report an adjusted EBIT margin of negative 4 to negative 6 percent.
In Germany, Lufthansa shares were trading at 14.18 euros, down 6.22 percent.
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