Total Group revenues for 2018 were a six-percent increase on the previous year. Burdened by the first-time application of the IFRS 15 accounting standard, total revenues were one percent up on 2017, at EUR 35.8 billion. The Adjusted EBIT for the year of around EUR 2.8 billion was only slightly below the record EUR 3.0 billion of the previous year, despite an increase of some EUR 850 million in fuel costs and EUR 518 million of expenses incurred through delays and cancellations (up a substantial 70 percent from the EUR 304 million of the prior year). In addition, the Eurowings result was burdened by some EUR 170 million one-off costs related to the integration of parts of the former Air Berlin fleet. Adjusted EBIT margin amounted to 7.9 percent. The net Group result for the year declined slightly to EUR 2.2 billion.
Net financial debt rose 21 percent in 2018 to some EUR 3.5 billion. However, the debt ratio (adjusted net debt in relation to Adjusted EBITDA) of 1.8 remained well below the Group’s target maximum debt ratio of 3.5. Free cash flow declined to EUR 250 million. In addition to the slight earnings decline, this was primarily due to non-recurring working capital effects in the prior-year result. 2018 also saw increases in both variable compensation and taxes paid, which were both the result of the substantial earnings improvements of the previous year.
The Group’s Network Airlines – Lufthansa, SWISS and Austrian Airlines – achieved an aggregate Adjusted EBIT for 2018 of EUR 2.4 billion, a further six-percent increase on the record EUR 2.3 billion of the previous year. Adjusted EBIT margin amounted to 10.7 percent, an improvement of 0.9 percentage points. Unit revenues (adjusted for currency movements) for the year were up 0.3 percent, owing mainly to increases in long-haul operations. Unit costs (adjusted for fuel and currency influences and excluding the impact of the change in accounting) declined by 1.7 percent.
Earnings at Eurowings in 2018 reflected the growth leap that the airline experienced through its integration of large parts of the former Air Berlin fleet, and were burdened in particular by some EUR 170 million in non-recurring associated costs. The integration was completed by the end of the third-quarter period. Adjusted EBIT for the year declined to EUR -231 million, and Adjusted EBIT margin fell accordingly to -5.5 percent, a decline of 7.0 percentage points. Unit revenues (adjusted for currency movements) were 2.9 percent down on 2017, owing largely to the tough prior year comparison base. Unit costs (adjusted for fuel and currency influences and excluding the impact of the change in accounting) were 1.9 percent above their prior-year level. Excluding the non-recurring integration expense, however, such unit costs were 2.9 percent below their 2017 level. For 2019, Eurowings expects a result at break-even level and thus a significant improvement over the previous year.
The Lufthansa Group is a global aviation group with a total of more than 550 subsidiaries and equity investments.
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