Lufthansa says expects 2016 dividend despite lower profit

Deutsche Lufthansa AG (LHA.XE) said on Tuesday it still expects to be able to pay a dividend for 2016, despite cutting its profit target for the year.

Net profit for the period fell to 437 million euros ($487 million) from 529 million euros a year earlier. Despite higher passenger volumes, traffic revenue fell 5.4% due to strong pricing pressure in both the airline and cargo businesses.

“Based on current calculations, we’re capable of paying a dividend,” Chief Financial Officer Simone Menne said.

Two weeks ago, the airline cut its profit target for 2016, saying that advance bookings, especially on long-haul routes to Europe, have dropped significantly due to a series of terror attacks and greater political uncertainty.

“Our industry has to prepare for a difficult second half,” Chief Executive Carsten Spohr said.

Lufthansa lowered its full-year forecast for adjusted earnings before interest and taxes, saying it expects the figure to be below the previous year. It had previously expected adjusted EBIT to be “slightly above” the prior year. The company also said it expects capacity growth of 5.4% for the full year, down from an earlier forecast of 6% growth.

Source: MarketWatch