MTU noted the PW1100G as one of the key revenue drivers for its commercial engine MRO business.
MTU Maintenance contributed the highest growth to MTU Aero Engines’ overall business last year as the division increased revenues by 32% over the 12 months to Dec. 31, 2022, but revenues fell slightly below expectations with supply chain disruptions cited as a factor.
In company results published Tuesday (Feb. 14), MTU Aero Engines increased revenue by 27% to €5.3 billion last year, with its operating profit increasing by 40% from €468 million to €655 million. The adjusted EBIT margin rose from 11.2% in 2021 to 12.3% in 2022 while income developed in line with the operating profit and rose 39% to €476 million during that period.
For its maintenance division, the Germany-headquartered company reported revenue of €3.6 billion ($3.3 billion) in comparison to the €2.7 billion it posted in 2021. MTU states that 70% of the revenue mix was work in MTU’s core MRO business and around 30% comprised maintenance work on the Pratt & Whitney geared turbofan engine. The narrowbody engine market was the key commercial maintenance driver, with the PW1100G-JM engine for the A320neo and the V2500 powering the A320 classic accounting for the largest share of revenue.
MTU had expected organic revenue growth of around 20% in the commercial maintenance business, however, disruptions in the global supply chain are having an impact on the company’s revenue targets. “On a dollar basis, MRO reported a 17% rise in revenue, which was not quite as strong as had been anticipated. That was due to longer turnaround times in commercial maintenance,” says Peter Kameritsch, MTU’s chief financial officer. This also impacted on MTU’s OEM business, which saw a rise of 18% to €1.8 billion from 2021’s €1.5 billion, albeit lower than anticipated.
Looking to 2023, MTU projects overall revenues of €6.1 billion to €6.3 billion. This figure is revised from its November 2022 forecast, which projected this year’s revenues to be between €6.4 billion and €6.6 billion.
“The revised guidance is mainly due to a change in our assumption on the U.S. dollar exchange rate,” says Lars Wagner, CEO of MTU Aero Engines, with MTU now basing its forecast on the U.S. dollar-Euro exchange rate of 1.10 per Euro instead of the previous 1.05 rate.
Specifically in the commercial maintenance business, MTU forecasts revenue growth “in the high teens” in terms of percentage range.
The company also sees a continuation of the supply chain challenges that have dogged the industry over the past few years. “We do see continuing supply chain hiccups throughout the year 2023, but it's certainly improving," says MTU’s Kameritsch.
“The majority of the issues are coming with a big structural parts, where we usually see have a duopoly in the U.S," he says. These companies struggled to compensate the loss of employees during the pandemic, but now "they're stepping up their personnel," he adds.
Kameritsch doesn’t foresee any capacity-related issues this year. “Industrial capacity, from my point of view, is available. Shortages are on labor, and this is to be continued and to be improved over the year of 2023.”
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