Airbus sees profits fall after issues with A400M
Airbus has reported a fall in annual profits as its overall performance was dragged down by problems with its A400M military transport.
The defence giant faced charges of €2.2bn (£1.85bn) due to problems with the A400M, including the propeller gearbox which it said has now been addressed.
But it added that challenges remain in meeting contractual capabilities and securing sufficient export orders in time.
The company reported earnings before tax and interest of €2.258bn (£1.9bn), down from €4bn (£3.37bn) in 2015.
Net income after adjustments was €995m (£839.7m), down from €2.696bn (£2.27bn).
Airbus chief executive officer Tom Enders said: “We have delivered on the commitments that we gave a year ago and achieved our guidance and objectives, with one exception, the A400M, where we had to take another significant charge totalling €2.2bn in 2016.
“De-risking the programme and strengthening programme execution are our top priorities for this aircraft in 2017.”
During the year Airbus faced a bruising battle with American rival Boeing over civil aircraft orders, and the two giants were also both the subjects of cases before the WFO over alleged subsidies.
Both companies also faced growing competition from new players in the civil airfield sector, such as the Canadian planemaker Bombardier and China.
Airbus, which employs 6,000 at its wing making plant at Broughton, took orders of 731 commercial aircraft during 2016, down from 1,080 the year before, with its order book valued at €1.06bn (£890m).
It hit a new record in deliveries of commercial aircraft, which were up to 688 aircraft, driving revenues in its commercial aircraft sector up 7%. The deliveries included 68 A320neo.
The order backlog in commercial aircraft reached a record 6,874 at the end of the year. Helicopter orders totalled 353.
There were strong orders too in the defence and space sectors but revenues here were down 9%, reflecting the negative impact of portfolio reshaping.
Mr Enders added: “The record order backlog is supporting the ramp-up plans and our performance in 2016 shows we can deliver on that.
“We successfully managed the rampup of the single-aisle and A350 programmes while at the same time transitioning to the more efficient version of the A320.
“Our commercial performance in helicopters was good despite a difficult market environment and we continued to strengthen and reshape the defence and space portfolio.
“We are taking additional steps to increase efficiency through the integration project, while investments in digital transformation will further improve our competitiveness.
“Overall, 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.”
Looking ahead, Airbus said it expects the world economy and air traffic to grow in line with forecasts, assuming no major disruptions.
The company said it expects to deliver more than 700 commercial aircraft over the coming 12 months, achieving a new record.
It is forecasting that percentage growth in earnings before tax and interest will be in single figures.
Besides Broughton, Airbus also has a presence in Newport where it works on cyber security, secure networks and drones.
The company was previously called EADS but changed its name to Airbus, formerly the name of its civil aircraft division.