Stock makes a leap: engine manufacturer MTU sees itself ahead of rosy times

The engine manufacturer MTU expects constant growth thanks to the take-off of the aircraft manufacturers business.

Stock makes a leap: engine manufacturer MTU sees itself ahead of rosy times

The engine manufacturer MTU expects constant growth thanks to the take-off of the aircraft manufacturers business. In the coming year, the Munich-based company wants to grow operationally by a fifth. The spare parts and military divisions also promise growth.

The Munich engine manufacturer MTU is counting on increasing new business with aircraft manufacturers. By 2025, profits will reach the billion mark and sales will increase to around eight billion euros, the company said. The Airbus supplier is already anticipating a strong plus for the coming year. The production volumes for new A320 engines and engines for regional aircraft are likely to increase significantly, as is the production of engines for business jets, said Michael Schreyögg, board member responsible for the program. But the spare parts and maintenance business and the military division also promise growth. This was well received on the stock exchange: the share gained up to 6.4 percent.

MTU has already predicted sales of between 6.4 billion and 6.6 billion euros for the coming year. Adjusted operating profit is expected to grow by more than a fifth. For the current year, MTU only increased its forecast at the end of October and is now expecting sales of between 5.4 billion and 5.5 billion euros. The company is benefiting from the favorable exchange rate trend for the dollar: the euro had recently lost a lot of value against the US currency - this benefits the people of Munich, who process a large part of their revenues in dollars.

MTU expects new commercial business to grow by around 30 percent in 2023. MTU customer Airbus is currently ramping up production of its A320/A321 short-haul aircraft. By the beginning of 2024, there should be 65 machines per month, by 2025 Airbus boss Guillaume Faury wants to reach the 75 mark. MTU program director Schreyögg said that the production of engines for long-haul aircraft should slowly pick up again. "All in all, the engine fleet in which MTU is involved should grow by 6.1 percent a year up to 2030. That opens up excellent prospects for us."

MTU manufactures both complete engines for some aircraft models and individual parts. In addition, MTU is also anticipating opportunities in the maintenance business, which is likely to grow by well over ten percent in the coming year. There is a lot of catching up to do, said Schreyögg. In addition, the recovery in air traffic is causing demand to pick up, especially in the short-haul and cargo sectors. The military business is likely to be up in the mid-single-digit percentage range.