Airbus keeps outlook as Q1 core earnings rise

The Airbus logo is pictured at Airbus headquarters in Blagnac near Toulouse, France, March 20, 2019. (File/Regis Duvignau/Reuters)
Updated 30 April 2019

Airbus keeps outlook as Q1 core earnings rise

  • Quarterly revenues rose 24 percent from a year ago to 12.55 billion euros ($14 billion), while adjusted operating profit jumped to 549 million euros from 14 million last year
  • Airbus suffered a cash outflow of 4.3 billion euros in the quarter as it built inventories but the company is expected to see that reverse course later in the year

PARIS: European planemaker Airbus stuck to its full-year financial targets after reporting slightly higher-than-expected core first-quarter profits, overshadowed by a heavy drain on cash as it stocked parts to ease industrial bottlenecks.
Quarterly revenues rose 24 percent from a year ago to 12.55 billion euros ($14 billion), while adjusted operating profit jumped to 549 million euros from 14 million last year, driven by higher commercial jet deliveries.
A Reuters poll had given a mean forecast for revenues of 12.99 billion euros and an adjusted operating profit of 520 million.
Higher deliveries of A320neo jets, which sell at a premium to earlier models, and progress in reducing costs on the larger A350 contributed to the sharp rise in profits. But Airbus still faces snags in producing a longer-range A321 with new cabins.
“Airbus is working to improve execution in its internal industrial systems and monitoring engine performance,” it said in a statement. Engine delays have also weighed on deliveries.
Excluding adjustments, earnings fell 9 percent partly as a result of a row over Germany’s suspension of export licenses to Saudi Arabia and costs for the A380 superjumbo, which Airbus has said it plans to shut down in 2021 due to poor sales.
Airbus suffered a cash outflow of 4.3 billion euros in the quarter as it built inventories but the company is expected to see that reverse course later in the year.
It reaffirmed 2019 targets including positive free cashflow of 4 billion euros and a 15 percent rise in operating profit.
Last week, Airbus’ rival Boeing abandoned its 2019 financial outlook, halted share buybacks and said it had lowered production due to the grounding of its 737 MAX jet after two crashes had cost it at least $1 billion so far.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 11 December 2019

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco has earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: