V2500 Billing, Order Issues Hit MTU’s 2019 Commercial MRO Revenues
In a record year for its MTU Aero Engines parent group, revenues in the commercial aftermarket division of MTU Maintenance declined slightly in 2019 as a result of changes related to ordering and billing processes for V2500 aftermarket work.
The German MRO giant says revenues fell from €2.8 billion ($3 billion) to €2.7 billion last year, however, in organic terms, its aftermarket revenues increased by 7%.
“This shows the ongoing high demand in this area as well as the fact that we posted a record U.S.$7.5 billion in MRO contract wins in 2019,” says chief financial officer Peter Kameritsch.
MTU says the largest shares of revenue in commercial maintenance were generated by the V2500 and GE Aviation’s CF34 engine, which powers several regional aircraft and business jets.
Earnings in the commercial MRO segment increased 9% year on year to €260.9 million. “To further optimize our market position, we are expanding both our capacities and the product and service portfolio,” Kameritsch says. He singled out the inclusion of Leap engines in its service offering, certification of its new Poland-based EME Aero joint venture with Lufthansa Technik covering GTF maintenance and the establishment of a new repair shop in Serbia earmarked for 2022.
In its outlook for 2020, MTU forecasts revenue to increase by a mid- to high-single-digit percentage in the commercial spare parts business. For its MRO division, it anticipates growth in the low twenties. “The remaining revenue increase results from the retrofit program for the Geared Turbofan, which is likely to hold back our margin in commercial maintenance,” Kameritsch says.
Overall, parent group MTU Aero Engines achieved record revenues last year, reaching a new high of €4.6 billion and bettering the previous year’s €4.5 billion. Operating profit came in at €756.9 million, comfortably beating 2018’s numbers by 13%. Earnings before interest and taxes increased from 14.7% to 16.4%, while net income grew by 12% year on year to €537.6 million.