Lufthansa exceeds profit expectations

WE DID what we promised.
Those were the words of Walter Gehl, the finance man on Lufthansa Cargo's executive board, as he referred to a conversational assurance made to FTW in February. At that time, he was expecting a profit for 1997 over 100-million Deutsche marks (Dm).
But the good news is that the word over can be translated into Dm94-m in the final report for the financial year of 1997 - with the air cargo giant recording a Dm194-m (R558.7-m) profit. This on revenues from ordinary activities totalling about Dm3.9-bn (R11.23-bn). Together with other operating income - including a part of book profits from the sale of the shares in the Luxembourg airline, Cargolux - total revenue exceeded the Dm4-bn level for the first time.
This is a turnaround after two tough years for the cargo company in the Lufthansa Group (it became an autonomous business in 1995). The first year of separation in 1995 saw a slight profit, but 1996 showed a Dm60-m (R172.8-m) loss.
Nobody is more influenced by world market conditions than air cargo carriers, chairman, Wilhelm Althen, told FTW in Frankfurt recently. Air cargo is an indicator of worldwide development - a barometer of global conditions.
Expectations for 1998 are good despite the Asian crisis. We are, of course, keeping the situation in Asia under close scrutiny, said Gehl. We're not taking it lightly.
These high expectations are reinforced by the company's results for the first quarter of this year. For the first time in four years, Lufthansa Cargo has posted positive results in the three months to March.
Although tonnage carried fell on the 1997 level by 2.5% to 395 000 tons (its total for 1997 was 1 713-m tons), performance - in terms of ton-kilometres - rose by 1.6%.
In a word, said Gehl, we have transported fewer tons over longer distances.
As in the 1997 business year, growth in first-quarter earnings outpaced our costs.