MTU Aero Engines revenue down 13 per cent in nine-month results

MTU Aero engines, coronavirus

MTU Aero Engines’ revenue has dropped 13.1 per cent in the first nine months of 2020, compared to 2019, it reported.

In its statement, the company said that it had a “substantial drop” in revenue in the first nine months of the year, especially in the commercial engine business, where revenue fell from €1,137.8 million to €850.2 million.

“Based on these results, we can now provide a more precise guidance for the full year,” said MTU Aero Engines CEO, Reiner Winkler.

“We now assume that revenue for the year will be between €4 and €4.2 billion. Our adjusted earnings before interest and tax (EBIT) margin is likely to be around 10 per cent, which is at the upper end of the range forecast to date.

“As expected, the downturn in the first nine months was highest in the spare parts business and in commercial series production. This is reflected in our revenue figures,” reported Winkler.

In the commercial engine business, the highest revenue generators were the PW1100G-JM for the A320neo and the V2500 for the classic A320 aircraft family. Over the year as a whole, it said that the organic decline in revenue is likely to be in the mid-to-high twenties in the commercial series production business and the high twenties in the spare parts business.

MTU

At the end of July, MTU forecast a broader revenue range of €4 to €4.4 billion and assumed an adjusted EBIT margin of between 9 per cent and 10 per cent. The company expects adjusted net income to develop in line with adjusted EBIT.

Revenue from the commercial maintenance business was €1,866.3 million in the first nine months of 2020, compared with €1,995.9 million in the same period the previous year.

“Here, the drop in revenue in the core business was partly offset by the Geared Turbofan retrofit program,” explained Winkler.

The GTF retrofit program comprises warranty work for the PW1100G-JM.

Winkler added: “For the full year, we assume an organic revenue reduction in the commercial maintenance business in the mid-single-digit percentage range.”

To date MTU had forecast that the decline would be in the low-to-mid single-digit percentage range. The principal revenue drivers in the commercial maintenance business were the V2500 and the PW1100G-JM.

The order backlog at the end of the quarter was €18.8 billion, down a billion from 2019. “This still represents a high level and arithmetically secures our capacity utilisation for more than four years,” added CFO Peter Kameritsch. It said that the majority of these orders are for the V2500 and the Geared Turbofa engines of the PW1000G family, especially the PW1100G-JM.

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