Airbus Group SE said profit would increase this year as it regains control over costs and production challenges from a switch to the latest A320 narrow-body aircraft and increased output of the A350 twin-aisle model.
The company still major faces issues with the delayed A400M military transport, which it yesterday said “remains a concern” following charges of 2.2 billion euros (US$2.3 billion) last year that weighed on net figures.
What should be boom times at Airbus given a record order book have been frustrated by holdups, including a shortage of interior fittings for the A350 and engine glitches with a revamped version of the A320 that caused it to make more lower-margin older airplanes.
CEO Tom Enders is betting that the problem models will get back on track this year, allowing the Toulouse, France-based company to reap the benefits of higher build rates.
“The progress we made last year gives us confidence that we have the building blocks in place to achieve our earnings and cash-flow growth potential,” Enders said in a statement.
De-risking and strengthening the A400M program will also be a top priority for this year, he said.
While a “crisis” concerning the model’s propeller gearbox was addressed with an interim fix, further challenges have emerged concerning the airplane’s military capabilities, causing cash retention by customers to weigh on the program into next year, leaving Airbus to seek talks to cap its exposure.
Airbus shares traded 0.7 percent lower at 66.77 euros as of 9:07am yesterday in Paris after earlier falling as much as 0.9 percent. The stock has advanced 6.3 percent this year.
While group earnings before interest and tax last year fell 3.6 percent to 3.96 billion euros, held back by the stuttering jetliner projects and a weaker performance at defense and helicopter divisions, the figure was marginally ahead of the 3.8 billion euros estimated by analysts.
Airbus also met its goal of achieving positive free cash flow, which totaled 1.4 billion euros, recovering from a negative 4.73 billion euros after the first nine months as the company delivered a mammoth 266 airplanes in the final quarter, or two-fifths of the annual total.
This year’s figure should be similar, before takeovers, disposals and customer financing.
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Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day