Deutsche Lufthansa AG, which is currently the second-largest airline in Europe, announced today that its dividend for 2014 is planned to be paid in spite of the fact that it posted a 75% decline in its 2013 net profit. The advance of its passenger unit and enhanced costs control made it possible for the company to meet its restructuring targets.
The company forecast a growth in its operating profit, which is expected to increase to between 1.3 and 1.5 billion euros this year. In comparison, Lufthansa posted an operating profit of 697 million euros in 2013. Deutsche Lufthansa AG projected an increase of about 40% in adjusted operating profit this year as well. The company also maintains its target to triple its operating profit in a period of two years.
Deutsche Lufthansa AG made an official statement today, revealing that the dividend that is to be paid amounts to 45 euro cents per share.
Mr. Christoph Franz, who is the Chief Executive Officer of the company, said in the statement, which was cited by Bloomberg: “We have strengthened the earnings power again last year. I am convinced Lufthansa and its employees will continue to successfully hold their own in an industry which will continue to change rapidly and consolidate further.”
As reported by the Wall Street Journal, Mr. Franz also explained that the decision to pay a dividend of 45 euro cents a share was made by the companys board “given the clear turnaround in the operating result, and as a sign of confidence for the years ahead.”
This statement of the company comes as Lufthansas CEO is stepping down in order to take the position of Chairman to Roche Holding AG. Carsten Spohr, currently head of the main passenger-airline unit of Deutsche Lufthansa AG, is to become the successor of Mr. Franz.
Deutsche Lufthansa AG surged 5.94% by 9:40 GMT to 18.98 euros in Frankfurt, marking a one-year change of +22.72%. The company is valued at 8.26 billion euros. According to the Financial Times, the 27 analysts offering 12-month price targets for Deutsche Lufthansa AG have a median target of 19.00 euros, with a high estimate of 26.50 euros and a low estimate of 13.00 euros. The median estimate represents a 6.06% increase from the previous close of 17.92 euros.