Airbus profit gains 1.6pc on A350 ramp-up
Airbus Group SE said profit rose 1.6 percent last year as it ramped up deliveries of the latest A350 model and broke even on the A380 superjumbo. Figures were held back by higher development spending.
Earnings before interest and tax rose to 4.13 billion euros ($4.6 billion) from 4.07 billion euros a year earlier, excluding one-time items, as sales gained 6 percent to 64.5 billion euros, Airbus said Wednesday.
Airbus, which gets two-thirds of revenue from its airliner unit, is benefiting from thousands of orders for new fuel-efficient aircraft placed before the recent drop in oil prices. The first A350 was handed over in late 2014, with 14 planes delivered in 2015 and 50 to be produced this year as the company embarks on one of the most testing output increases in its history.
Chief Executive Officer Tom Enders called the results "solid" and said that Toulouse, France- based Airbus is "focused on program execution and managing the challenges we face with the acceleration of the A350." Both cash flow and Ebit, excluding items, should be "stable" this year, he said.
"That may not be terribly exciting, but the last thing we need is excitement at this critical juncture," Sandy Morris, an aerospace analyst at Jefferies International in London, said in a note to investors.
Airbus shares traded 1.3 percent higher at 56.12 euros as of 9:05 a.m. in Paris. The stock has declined 9.5 percent this year after surging 50 percent in 2015.
Fourth-quarter Ebit before oneoffs fell 10 percent to 1.33 billion euros, led by a 26 percent drop at the jetliner unit as the business spent more on research and development. The contribution from Dassault Aviation SA, maker of Rafale warplanes and Falcon business jets, declined as Airbus sells down its stake.
Analysts had forecast a full-year profit of 4.38 billion euros, based on 14 estimates. Free cash flow for the 12 months surged to 2.8 billion euros, buoyed by 1.7 billion euros in proceeds from selling Dassault shares. While the three-month earnings figure was weak, it was more than offset by the "thunderous" cash performance, Morris said.
Airbus's latest program, the re- engined A320neo, saw delivery of the first plane last month and the company said it's focused on "service readiness for early operations in line with customer expectations," reflecting concern about glitches with the Pratt & Whitney engines supplied on some of the planes. Deliveries will be "backloaded" this year, it said.
The company boosted single-aisle output ahead of the A320neo's introduction with the opening of its new Alabama plant in September, a move that could also aid U.S. sales.
Production of the A330 wide-body is being restored to seven jets a month, Airbus said, while 2015 marked the first year in which it has broken even on A380 manufacturing, though the program isn't unlikely to ever recover its development costs.