Munich-based MTU Aero Engines has upped its full-year operating profit forecast after adjusted earnings before interest and tax during the first six months in 2011 rose nearly 14% year-on-year largely due to increased commercial engine part sales and improved efficiency.
The company initially forecast 2011 EBIT adjusted to remain similar to last year's €311 million ($449 million), it has now revised the target to €325 million, up 4.5%.
Total revenues between January and June hardly changed when compared with the same period in 2010 - down 0.2% to €1.35 billion ($1.95 billion) - although MTU blames this on the dollar-euro exchange rate. The company has thus far calculated it at $1.35 to the euro, but has now revised this to $1.40 for the rest of the year. Adjusted for this effect, half year sales would have increased 5%, it said.
The engine subassembly manufacturer and maintenance provider expects a 7-8% revenue increase for the full year.
The commercial engine business, which includes spare part sales, registered 11% revenue growth to €633.5 million while the commercial MRO division saw a 4.7% sales decline to €518.7 million.
However, commercial engine maintenance EBIT rose by 7% to €42.1 million, with the division's margin improving from 7.2% during the first half 2010 to 8.1% this year. This was due to better efficiency and greater repair volume per shop visit, said chief financial officer Reiner Winkler.
Sales in the military engine business declined 15.6% to €210 million due shrinking defense budgets.
As a consequence, the company is moving employees from its military engine division to the commercial business, said chief executive Egon Behle. Overall staff numbers have increased by almost 300 employees to around 8,040.
Free cash flow dipped 33% from €125.1 million during the first half 2010 to €83.6 million this year.