MUNICH (dpa-AFX) - Munich-based engine manufacturer MTU is becoming even more optimistic for the current year. In 2023, the board of management now certainly expects the highest profit in the company's history in its day-to-day business. Industry experts had already expected the board led by new group CEO Lars Wagner to set the bar higher in the course of the year. Back in February, MTU CFO Peter Kameritsch had already held out the prospect of a record operating profit in 2023. Monday's news was well received on the stock exchange.

Around noon, MTU shares led the list of winners in the weakening Dax index with a gain of 3.4 percent. So far this year, MTU shares have gained 16 percent, compared to 16.9 percent for the Dax.

In the current year, earnings before interest and taxes (Ebit) adjusted for exceptional items are expected to rise to more than 800 million euros, as the Dax group surprisingly announced in Munich this morning. In the previous peak year 2019, MTU had achieved an adjusted operating profit of 757 million euros.

According to Jefferies analyst Chloe Lemarie, the increase was not unexpected. But she had rather not expected it until the figures for the first half of the year. The early timing and magnitude of the increase should be positively received, the expert wrote. The new earnings target supports her view that the recent problems with the geared turbofan engine, which had weighed on the share price in recent weeks, are now priced in. Daniela Costa of U.S. investment bank Goldman Sachs also welcomed the engine manufacturer's statements. However, analysts on average had already been expecting an operating profit close to the 800 million mark.

MTU's management explained its raised forecast with expectations for the further course of business. Revenues are still expected to rise to a record level of 6.1 to 6.3 billion euros. However, the adjusted operating margin is now expected to exceed the previous year's figure of 12.3 percent. Previously, the Management Board had targeted a margin at the prior-year level. This would have corresponded to an adjusted operating profit of between 750 and 775 million euros for 2023.

In the first quarter, MTU generated revenues of 1.54 billion euros, 30 percent more than a year earlier. Adjusted operating profit (adjusted Ebit) even jumped 62 percent to 212 million euros. The adjusted operating margin improved accordingly from 11.1 to 13.7 percent.

MTU joins forces with other engine manufacturers such as General Electric and Raytheon Technologies subsidiary Pratt & Whitney to build engines for aircraft made by the major manufacturers Airbus, Boeing and Embraer.

The biggest revenue generator is Pratt & Whitney's geared turbofan engine, which is used primarily on the highly popular Airbus A320neo family of medium-haul jets./mne/stw/tih