February 19, 2013 / 8:53 PM / in 5 years

Lufthansa swings to 2012 profit, suspends dividend

FRANKFURT (Reuters) - Deutsche Lufthansa (LHAG.DE) posted a net profit of 990 million euros ($1.32 billion) in 2012, as the one-off sale of equity investments helped it swing from a loss of 13 million a year earlier, Germany’s biggest airline said on Tuesday.

The tail of of Germany's Deutsche Lufthansa aircraft is pictured at Frankfurt Airport April 7, 2010. REUTERS/Johannes Eisele

The airline said it planned to suspend its dividend payment and fully retain its net profit as it bolstered a restructuring programme.

“The Executive Board plans to close sites and to merge administrative functions,” the airline said in a statement on its 2012 results, released in advance of scheduled publication on March 14.

Operating profit fell to 524 million euros from 820 million a year earlier, reflecting in part costs of 160 million euros for the group’s cost-cutting programme, dubbed SCORE.

The group had been expected to post operating profit of 595 million euros, according to Thomson Reuters data.

Lufthansa had warned last year that the planned gains from the SCORE programme would be eaten up by high jet fuel prices and a slower economy and that it would have to intensify its savings effort.

    The cost-cutting plan is aimed at sustainably improving the operating result by 1.5 billion euros by 2015.

    The company said the partial transfer of Austrian Airlines’ flight operations to Tyrolean Airways gave a one-time boost of 115 million euros to the 2012 operating result.

    Lufthansa also said it plans to order eight long-haul aircraft and 100 short- and medium-haul aircraft, with a total cost of around 9 billion euros, to be delivered between 2015 and 2025 from Boeing (BA.N) and Airbus EAD.PA.

    Reporting by Jonathan Gould; Editing by David Gregorio

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