Lufthansa Reports Loss, Hit By Charges; Not To Pay Dividend

(RTTNews) - Deutsche Lufthansa AG (DLAKY, DLAKF) on Friday reported a slip to loss in 2014, hurt by pension charges, loss from fuel hedging and the divestment of a division, while revenues came in flat.

The German airline company also said it would not pay dividend for 2014, citing the above charges.

Lufthansa shares dropped more than 4.5 percent in Germany, following the announcement.

As per German accounting standards, Lufthansa reported a net loss of 732 million euros in 2014, compared with a profit of 407 million euros in the prior year.

Lufthansa said the loss stemmed from the sale of the IT Infrastructure segment of Lufthansa Systems and higher pension liabilities as the discount rate dropped 3.75 to 2.6 per cent. The airline also had to provide for loss from fuel-price hedging as oil prices plunged.

Lufthansa, which was hit by pilot strikes last year, also incurred related costs of 232 million euros in 2014.

Meanwhile the airline's revenues in 2014 were unchanged from the previous year at about 30 billion euros.

As per international financial reporting standards, Lufthansa posted a net profit of 55 million euros or 0.12 euros per share in 2014, a steep decline from 313 million euros or 0.68 euros per share in the prior year.

Operating profit, or earnings before interest and taxes and adjusted for asset-valuation and financial-investment effects, were 954 million euros in 2014, compared with 699 million euros a year ago.

On a normalized basis, operating profit in 2014 totaled 1.18 billion euros, compared with 1.04 billion euros in the prior year.

Lufthansa said the target of an operating result of 1 billion euros before strike costs in November and December has been achieved.

The airline faced pilot strikes last year after disagreements over retirement benefits, while business conditions were tough as stiff competition forced the industry to fix low travel fare.

Lufthansa will present its final financial results for 2014 on March 12.

On the Xetra Exchange, Lufthansa is trading at 13.26 euros, down 0.63 euros or 4.54%, on a volume of 12 million shares.