=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/05/12/f= inancial1009EDT0055.DTL --------------------------------------------------------------------- Wednesday, May 12, 2004 (AP) Lufthansa posts net profit in first quarter with boost from share sale DAVID McHUGH, AP Business Writer (05-12) 07:09 PDT FRANKFURT, Germany (AP) -- German airline Lufthansa swung to a profit in the first quarter after posting a loss for the same quarter a year ago, with the sale of a stake in the Amadeus travel reservation company pushing the airline into the black. Without the share sale, Lufthansa said Wednesday its quarterly operating losses narrowed from a year ago as it cut costs and enjoyed stronger demand for air travel from growing economies in the United States and Asia. It said business was looking up and that it expected to post a net profit for the entire year, compared to a net loss of 984 million euros in 2003 when passenger demand was slack and earnings were hit by write-offs on the company's catering business. The first-quarter net profit of 62 million euros ($73 million) in the first quarter contrasted with a loss of 356 million euros a year ago. The latest results included 292 million euros ($345 million) from the sa= le of part of Amadeus Global Travel Distribution SA. Lufthansa cut its 18.3 percent stake to 5.1 percent in February by selling 78 million shares on the Madrid stock exchange. The airline trimmed its operating loss to 116 million euros ($137 millio= n) from 419 million euros in the first quarter of 2003. Operating figures exclude one-time items such as the Amadeus sale and also leave out financial items such as interest and taxes. Lufthansa's sales rose to 3.89 billion euros ($4.6 billion) in the quarter, up from 3.7 billion euros a year ago, when the looming U.S.-led invasion of Iraq and the SARS illness helped reduce demand for air travel. Chief executive Wolfgang Mayrhuber said the improving quarterly results came from pursuing a strategy that included lowered costs and trimming side businesses to concentrate on its core aviation activities, which include passenger flights, hauling freight and maintenance services. "We are better, leaner and more efficient," Mayrhuber said in a statemen= t. "The upswing is palpable, and as a leading network carrier Lufthansa is well prepared for it." With demand for seats and passenger numbers on the rise, Lufthansa was able to boost its passenger load factor -- a measure of how full its planes are -- by 2 percent to 72.6 percent. In one measure of the airline's effort to contain costs, it had 1.4 percent fewer employees -- 93,479 -- compared to a year ago. Overall costs fell 3.6 percent, it said. Mayrhuber said he was optimistic about the prospects for the year as a whole, saying that the airline was already profiting from the general economic upturn in Asia and the United States. "Demand is also picking up in Europe, and Lufthansa will react flexibly and quickly in order to exploit these opportunities for growth," Mayrhuber said. The first quarter is typically the airline's weakest, the company said. Both the operating and net results fell short of expectations by analysts surveyed by Dow Jones Newswires, who on average expected net profit of 63 million euros ($74 million) and a narrower operating loss of 90 million euros ($106 million). Lufthansa shares were down 2.5 percent in midday trading to 12.29 euros ($14.50). ---------------------------------------------------------------------- Copyright 2004 AP