Airbus profit rise beats forecasts, but delivery challenges expected

Airbus is facing industrial delays at a a new expanded plant in Germany. (Reuters)
Updated 31 July 2019

Airbus profit rise beats forecasts, but delivery challenges expected

  • Airbus is the manufacturer of the A380, the world’s biggest passenger plane

PARIS: Airbus posted stronger-than-expected core second-quarter earnings, led by the switch to efficient new single-aisle jets, and maintained its profit forecast for the year while warning of delivery challenges in the second half.

Europe’s largest aerospace group said second-quarter adjusted operating profit rose 72 percent to €1.98 billion ($2.2 billion), led by a more-than-twofold rise at the main Airbus commercial planemaking arm. Revenues rose 23 percent to €18.32 billion.

Analysts were on average forecasting adjusted quarterly operating income of €1.774 billion on revenues of €17.824 billion, according to a company-compiled consensus.

Airbus is trying to overcome industrial delays at a newly expanded plant in Hamburg, Germany, which is responsible for enhanced cabins for the in-demand A321neo, the largest version of the planemaker’s best-selling single-aisle family.

Airbus said it was looking at options to increase the share of the A321neo in the wider A320neo family.

“The second half of the year in terms of deliveries and in particular free cash flow continues to be challenging,” Chief Executive Guillaume Faury said in a statement.

Airbus is nonetheless on course to be the world’s largest planemaker in 2019 as US rival Boeing faces a longer-than-expected grounding of its 737 MAX, ordered by worldwide regulators in March in the wake of two fatal accidents.

Boeing last week posted its largest-ever quarterly loss due to the grounding crisis.

Airbus took €75 million in new charges in the second quarter, related to the cost of winding down its A380 superjumbo program after deciding to scrap output due to weak demand.

Air France-KLM on Tuesday announced plans to retire the world’s largest jetliner to concentrate on smaller models like the A350, which Airbus said was on track to break even this year after “good progress” in reducing costs.

Airbus took €90 million in other charges including compliance costs as it pursues a four-year-old investigation into the use of middlemen in aircraft and other sales. The company said in its accounting notes that it was too early to assess liability for potential fines or other lawsuits.

The European company warned formally for the first time of damage to deliveries and finances if the US goes ahead with plans to imposes tariffs on European planes as part of a long-running transatlantic trade dispute over subsidies.

Airbus said it continued to support a negotiated solution.


Conflict-hit Libya to restart oil operations but with low output

Updated 10 July 2020

Conflict-hit Libya to restart oil operations but with low output

  • There is significant damage to the reservoirs and infrastructure
  • A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker

TUNIS: Libya’s National Oil Corporation (NOC) lifted force majeure on all oil exports on Friday as a first tanker loaded at Es Sider after a half-year blockade by eastern forces, but said technical problems caused by the shutdown would keep output low.
“The increase in production will take a long time due to the significant damage to reservoirs and infrastructure caused by the illegal blockade imposed on January 17,” NOC said in a statement.
A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker, chartered by Vitol, which two sources at Es Sider port said had docked and started loading on Friday morning.
The blockade, which was imposed by forces in eastern Libya loyal to Khalifa Haftar’s Libyan National Army (LNA), has cost the country $6.5 billion in lost export revenue, NOC said.
“Our infrastructure has suffered lasting damage, and our focus now must be on maintenance and securing a budget for the work to be done,” NOC chairman Mustafa Sanalla said in the statement.
Control over Libya’s oil infrastructure, the richest prize for competing forces in the country, and access to revenues, has become an ever-more significant factor in the civil war.
The internationally recognized Government of National Accord, supported by Turkey, has recently pushed back the LNA, backed by the United Arab Emirates, Russia and Egypt, from the environs of Tripoli and pushed toward Sirte, near the main oil terminals.