The Strategist

Airbus promises profit growth and record deliveries

02/15/2018 - 14:07

Airbus SE has promised a profit growth of 20% this year, provided that the company will be able to smooth production problems in the two key aviation programs. The company's shares have shown the maximum growth since 2012, reports Bloomberg.

Brian Bukowski via flickr
Brian Bukowski via flickr
The European Aircraft Corporation completed in 2017 with a record volume of unfulfilled orders and delivered more aircraft than ever before.

The company's shares jumped 10% after Airbus assured investors that it could exceed last year's production and build 800 aircraft, "if engine manufacturers fulfill their obligations."

Problems with engines slowed the production of the manufacturer’s best-selling aircraft A320neo.

Airbus's difficulties with this narrow-body airplane and the A400M military transport aircraft have at times overshadowed the benefits from the surge in sales of commercial airliners. Airbus CEO Tom Enders said the company is working on measures to gain control over both problematic programs.

"The increase in production of the A320neo remains complex and requires that engine suppliers deliver in accordance with their obligations," Anders said, adding that the impact on deliveries of the latest engine problems is now being evaluated.

Airbus in the past year has written off € 1.3 billion in connection with the A400M program. Thus, the total overspending for the program exceeded € 8 billion.

Last week, the company entered into a preliminary agreement with seven buyer countries, aimed at restarting the military transport project after several years of cost overruns.

Adjusted profit of Airbus before interest and taxes (EBIT) in 2017 grew by 8% to € 4.25 billion. Analysts on average forecast a profit of € 3.99 billion.

This year, the adjusted EBIT should increase by 20%, provided that the target targets for deliveries are met, the company said.

The corporation's revenue in 2017 increased by 0.3% to € 66.8 billion.

Annual dividends were increased by 11% to € 1.50 per share.

In January, the Emirates airline from the UAE made a large order for the flagship Airbus A380 aircraft, which will prolong the life of the program of these aircraft.

Earlier, the European aircraft building concern allowed the possibility of stopping production of the A380 due to weak demand for the world's largest passenger aircraft.

The Dubai-based carrier, already the largest buyer of the A380, signed an agreement on the purchase of 20 two-deck four-engine passenger aircraft with the option of purchasing 16 more airliners. The order's value is $ 16 billion. The purchase will prolong production of the A380 until 2029, if Emirates buys all the planes, Airbus said.