MTU Aero Engines posts positive second quarter results

MTU Aero Engines has posted more positive than expected results for the second quarter as well as first half of 2024. The engine manufacturer's revenues were €1.7bn in the second quarter of the year, up from €1.5bn from the same period a year prior. For the first half of the year, its revenues were €3.4bn - up from €3.1bn a year prior. Its adjusted revenues for its military engine business were up 19% in the first half of the year to €272 million, while its commercial engine business was up 5% to €903 million. ""The revenue growth was mainly due to the TP400-D6 for the A400M and the new generation fighter engine for the next-generation European fighter jet,"" said MTU CFO Peter Kameritsch. He continued: ""[MTU's commercial engine business] growth was driven by geared turbofan (GTF) engines and engines for business jets. The rise in the spare parts business was attributable to widebody engines, the V2500 for the classic A320 family and engines for business jets."" Revenues in its commercial maintenance business grew in the second quarter from €1.1bn last year to €1.2bn, while in the first half it grew 11% to €2.3bn. GTF maintenance accounted for around 30% of its commercial maintenance. ""In view of the lower material intensity in GTF shop visits, we now expect GTF MRO to be around 35% over the full year,"" said Kameritsch. The company had previously estimated GTF to account for 40-45% of its MRO business for the year. Adjusted operating profit was $252 million in the second quarter, up from €193 million the same financial period a year prior. For the first half of the year, its adjusted operating profit was up 16% to €470 million. Beating expectations, its net income for the quarter was $162 million, or an adjusted earnings per share (EPS) of €3.38 per share, up from €122 million, or an EPS of €2.28. For the first half of the year, it was up 13% to €342 million, or an adjusted EPS of €6.31. ""With this performance, we remain on track for our full-year targets,"" said MTU Aero Engines CEO Lars Wagner. ""Our assumption is supported by a sustained positive market environment and progress in the GTF fleet management programme."" The company confirmed its guidance for the full year. It also now expects an EBIT margin of around 13% - having previously estimated it to be one percentage point below. Its revenue target for the year is between €7.3-€7.5bn. The company's free cash flow was up from €42 million in last year's second quarter to €90 million. For the first half, its free cash flow was down 22% to €105 million. By the end of the second quarter, its cash and cash equivalents were up 30% from the end of last year to €1.1bn. Its net financial debt was up 13% to €711 million. Total assets and liabilities was up 7% when comparing the same periods to approximately $11bn. Its order backlog value was up 3% to €25.2bn.