FILE PHOTO: An Airbus A400M military aircraft participates in a flying display during the 51st Paris Air Show at Le Bourget airport near Paris, France, June 16, 2015. REUTERS/Pascal Rossignol/File Photo
February 15, 2018
By Tim Hepher
PARIS (Reuters) – Airbus on Thursday took a new 1.3 billion euro ($1.6 billion) hit on its A400M military transport plane, lifting charges on Europe’s troubled defense project above 8 billion euros and clouding higher-than-expected underlying profits.
Europe’s largest aerospace group posted adjusted 2017 operating profit of 4.253 billion euros on revenues of 66.767 billion euros and predicted a 20 percent rise in the widely watched core profit item.
Analysts were on average expecting adjusted 2017 operating profits of 3.996 billion euros and revenues of 67.343 billion, according to a poll conducted for Reuters.
The A400M charge comes after Airbus last week reached a provisional agreement with seven European NATO buyer nations over further delays in deliveries for the new troop carrier..
Airbus Chief Executive Tom Enders said in a results statement that the deal would “significantly reduce the remaining programme risks”.
Airbus announced an 11 percent dividend hike.
It also reaffirmed a target of around 800 jetliner deliveries for 2018, subject to the performance of its engine manufacturers.
Airbus is in the midst of a switchover on its best-selling A320 family to an upgraded model with new engines, but has been beset by delays in engine supplies mainly from Pratt & Whitney.
The impact of a new problem discovered with those engines a week ago is “under assessment,” Airbus said.
“The A320neo ramp-up remains challenging and requires that the engine suppliers deliver in line with commitments,” it added.
The planemaker, which competes with Boeing, reported “good progress” on production of the new A350 wide-body jet and reiterated plans to reach output of 10 a month by end-year.
Airbus also said it had reached agreement with European credit agencies that will allow Airbus to apply for export credits on a case by case basis.
The funding was suspended in 2016 when Airbus was reported to have made misleading applications, triggering a corruption probe.
However, Airbus took a 117 million euro fourth-quarter charge following a settlement with German prosecutors over a corruption case linked to a fighter sale to Austria, including some 35 million euros of ongoing legal costs.
(Reporting by Tim HepherEditing by Sudip Kar-Gupta)