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Author: Katharina Grimme
For the first nine months (January to September) of the 2006 financial year, Lufthansa Systems reports revenues of €447m, up 4.4% year-on-year. External revenues were up 9.2% to €202m, while captive revenues only grew by 1.1% to €275m. EBITDA was down by 10%, amounting to €54m. The company expects operating results to be down on the previous year.
Comment: It is good to see that non-captive revenues continue to grow, now accounting for 58%. However, the recent outsourcing megadeal with LSG Sky Chefs (see EVD of 8 Sept 2006) could alter this share.
Operating results are less favourable due to increased costs of materials and services from infrastructure outsourcing projects such as the non-captive deals with pharma/life science firm Dynamit Nobel in June 2006 and a contract extension with publisher Süddeutscher Verlag in April 2006. While its airline-specific solutions are reasonably successful, we question if Lufthansa Systems can run basic infrastructure (and network) outsourcing services profitably - and indeed if the company should engage in such generic activities.
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