Airbus earns 825 million euros in first half of the year, down 46%
European aeronautics manufacturer Airbus earned €825 million in the first half of the year, down 46% compared to the same period in 2023, due to a charge of €989 million essentially linked to its space activities.
Net operating income (ebit) fell 23% to 1.456 billion, but in adjusted terms (basically excluding non-recurring items) the decline reached 47% to 1.391 million, Airbus said in a statement Tuesday.
The main reason comes from the defense and space division, where adjusted ebit was negative 807 million, compared to positive 78 million in the first half of last year.
The European giant had already announced a little over a month ago, on June 25, that it was going to establish a provision in its half-yearly accounts, which it then valued at 900 million, as a result of an adjustment of schedules, workload, procurement and risks and costs in certain telecommunications, navigation and observation space programs.
All options open for space business
In a conference call to present the results, the group’s CEO, Guillaume Faury, explained that for “several months” they will continue a review of their space businesses in which they will contemplate “all options”, so theoretically that includes the possibility of divesting them.
Faury pointed out that the review of most of the programs has been completed, but until the last one has been completed, the process will not be considered concluded.
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There is no charge, however, for its A400M military transport aircraft program being assembled in Seville (which in the past resulted in provisions of billions of euros), and this even though the company acknowledges that “risks remain in the qualification of technical capabilities and associated costs”.
There is also uncertainty about “aircraft operational reliability, cost reduction” and the ability to guarantee production volume based on the latest revisions.
In the first half of the year, 4 A400M units were delivered to customers, compared to 3 in the first half of 2023.
Adjusted net operating income declined by 13% in its core commercial aircraft business to EUR 1,954 million and in helicopters by 16% to EUR 230 million.
The European giant’s turnover progressed by 4% to 28.825 million euros, with a 4% increase in commercial aircraft (21.215 million), stagnation in helicopters (3.191 million) and a 7% rise in defense and space (4.985 million).
In the first half of the year, Airbus increased deliveries of commercial aircraft to its customers, with 323 aircraft units (seven more than a year earlier) and 124 helicopters.
Problems with some suppliers
As already announced on June 25, Airbus has revised downward its expectations for this year to take into account the problems with some of its suppliers and with the production plan, so that its target is now to deliver around 770 commercial aircraft, and not 800 as previously announced.
One of the consequences is that Airbus management believes that adjusted ebit this year will be around 5.5 billion euros, well below the range of 6.5 to 7 billion that it anticipated until a month ago.
Faury said that these production problems have occurred with “a limited number of suppliers”, especially for some cabin equipment, such as seats, and engines.
That is what has led it to reduce the 2024 delivery target and to delay by one more year, to 2027, the goal of increasing the production cadence on its A320 family of single-aisle aircraft to 75 per month.
Manufacturing bottlenecks is the big challenge facing Airbus, like its U.S. competitor Boeing, in an aviation market where demand continues to grow strongly in response to the increased appetite for flying and the willingness of companies to equip themselves with less kerosene-consuming aircraft.
In the first half of the year, the European group received orders for 327 aircraft (310 excluding cancellations), bringing its order backlog to 8,585 units as of June 31. This represents more than 11 years of production at the current rate.
With information from EFE
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