Germany’s MTU Aero Engines has warned of a potential tariff impact of around €50 million ($57 million) or more this year if no mitigation measures are put in place.
Disclosing the potential hit as the Munich propulsion specialist revealed that it traded ahead of market expectations in the first quarter, MTU said it had “assessed the highly volatile global tariff situation”.
Based on the current tariff levels proposed by the USA – 20% for imports from the EU – MTU expects that “without mitigation measures, a direct impact in the mid to high double-digit million euro range could arise in fiscal [year] 2025,” it says.
“MTU is currently exploring all possible measures to reduce this potential burden.”
However, it notes that any direct or indirect tariff effects have not yet been factored into its full-year guidance.
MTU is responsible for up to 18% of the content on each Pratt & Whitney geared turbofan engine, depending on the variant.
For the first quarter of 2025, MTU says it generated earnings and free cash flow “above market expectations”.
It is currently maintaining its full-year guidance for those figures, although it concedes that these could be revised as the tariff impact becomes clearer.
In February, it forecast adjusted EBIT would grow “in the mid-teens percentage range” with free cash flow in the low triple-digit million euro range.
Preliminary revenue for the three months ended 31 March stood at €2.1 billion, with adjusted earnings of €300 million.
Revenue guidance has adjusted downwards slightly due to the decline in value of the US dollar against the euro.
MTU will disclose its first-quarter financial figures on 6 May.
