Commercial engines drive first quarter growth at MTU

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MTU Aero Engines has registered overall sales and operating profit growth in the first quarter of 2011, primarily driven by its commercial engine division.

Total sales grew by 4% to €664.8 million ($983.6 million) over the first three months in 2010 while earnings before interest and tax (EBIT) rose by 17% to €80.5 million. The company's operating margin was up 1.4% to 12.1% while net earnings remained relatively flat at €40.4 million.

The increases were mainly due to the commercial engine business, where revenues for new engines and spares parts grew by 17% to €309.6 million.

Also, the maintenance division showed a positive performance with commercial MRO sales going up 3% to €251.6 million. The sector's EBIT went up 44% to €20.5 million.

Work for the International Aero Engines V2500 turbofan family, in which MTU is a shareholder, led both the commercial engine and MRO business units' sales.

The company's military engine division, however, recorded an 18.1% sales decline from €136.1 million in the first quarter 2010 to €111.4 million during the first three months this year. This was "expected" given the defence budget cuts across different governments, the company said.

MTU's free cash flow more than doubled from €31.7 million at the end of March 2010 to €70.9 million this year.

The engine order backlog shrunk slightly to a value of €4.3 billion in the first three months - but this does not include the recent sales of the Pratt & Whitney PW1100G geared turbofan, in which MTU is a partner, for the Airbus A320neo programme.

MTU chief executive Egon Behle said he was optimistic that "we will reach our targets and reaffirm our full-year forecast for 2011".

The Munich-based company expects its total revenues to rise by 7-8% in 2011, with adjusted EBIT and net income to remain stable.