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Airbus is committed to a higher production rate after lowering its profit by 11%, to 3,789 million

The proposed dividend repeats 1.80 euros per share, plus a special payment of 1 euro

One of the Airbus A350 models.Pascal Rossignol

The European aeronautics giant Airbus says it has met its forecasts for 2023 by achieving a net result of 3,789 million euros, which represents a decrease of 10.8% from the historical profit record achieved in 2022. Earnings per share are of 4.80 euros, compared to 5.4 euros a year ago. The downward trend had been observed during the year as a result of the growing difficulties in the supply chain. In the last quarter, net profit was 1,457 million, 13% lower than the comparable period. Despite everything, Airbus is putting its efforts into increasing its aircraft production rate between now and 2026 and thus taking advantage of the crisis of its American rival Boeing due to the incidents recorded with its flagship model B737 MAX.

Airbus revenues have reached 65.4 billion euros, with an increase of 11%. The adjusted ebit (underlying business margin without the impact of program provisions, restructuring or exchange rates or the result of corporate operations) was 5.8 billion. The latter improves from 5,627 million euros in 2022. However, the reported ebit, of 4,603 million, is worse than that of 5,325 million a year ago. The company explains a net adjustment of 1,235 million, of which the majority (1,030 million) is related to the imbalance of working capital in dollars and the revaluation of the balance sheet. In this sense, Airbus notices the gap between the date on which it sells an aircraft and the date on which it delivers. And the worse performance of the Defense and Space business is also being felt. This last division reduces its adjusted ebit by 40%, to 229 million euros.

Based on last year’s performance, a dividend proposal of 1.8 euros per share comes out, to which is added an extraordinary dividend of 1 euro. These payments, scheduled for April 18, will go through the shareholders meeting on the 10th of that month.

Free cash flow, before mergers, acquisitions and customer financing, was 4.4 billion in 2023 (4.68 billion in 2022). The group has a net treasury of 10.7 billion, raising this position from 9.4 billion.

The list of deliveries reflects 735 aircraft last year, a volume that exceeds the 661 devices of the previous year. This new sum is made up of 68 units of the A220 model, 571 A320 family aircraft, 32 A330 aircraft and a total of 64 A350. The 735 devices distributed are above the 720 planned for all of 2023.

As for the new forecasts, without taking into account any additional disruption to the global economy, air traffic or supply chain, Airbus expects to deliver up to 800 aircraft. For the adjusted ebit for 2024, a range of 6,500 to 7,000 million has been set, better than that obtained in 2023, and a free cash flow of about 4,000 million is expected, somewhat lower.

Airbus CEO Guillaume Faury talks about “solid order volume across all our businesses” and meeting commitments. “It has been a significant achievement given the complexity of the operating environment,” explains the executive.

More strength in the factory

Airbus’ intention is to “continue investing in our global industrial system and advance on our path of transformation and decarbonization,” according to the CEO. Gross orders for commercial aircraft amounted to 2,319, which doubles the 1,078 aircraft in 2022. Net orders after cancellations total 2,094 (820 in 2022), which is valued at around 162 billion, 172% more than in 2022. The order book stands at 8,598 commercial aircraft as of December 31, 2023, with a value of 490,812 million euros (+26%).

By division, the commercial aviation area has contributed 15% more revenue due to the greater volume of deliveries. Its adjusted ebit, with the aforementioned 4,818 million, is 5% higher than the previous year. Airbus Helicopters kept its stable at 346 units, managing to improve its sales by 4%. Its adjusted ebit grows from 639 million to 735 million euros (+15%). And Defense and Space’s turnover rose 2%, driven by Military Air Systems and Connected Intelligence. In total, eight A400M military transport aircraft were delivered, compared to ten in 2022. Its adjusted ebit fell from 384 million to 229 million due to charges of 600 million in different Space programs.

The company maintains the increase in production of the A220 model with the objective of reaching a monthly rate of 14 aircraft in 2026. Regarding the A320 program, production “progresses at a good pace” towards a rate of 75 aircraft per month in 2026. Airbus has begun building the second final assembly lines in Tianjin (China) and Mobile (USA), while the new A320 family final assembly line in Toulouse delivered its first aircraft last December.

Another model that should help the manufacturer’s growth is the A321 XLR, with a narrow aisle and long radius. The first unit already committed to a customer entered the final assembly line in December, with which the entry into service of this type of aircraft is expected to occur in the third quarter of 2024.

Regarding widebody aircraft, Airbus seeks to achieve a monthly rate of four aircraft for the A330 in 2024 and ten aircraft for the A350 in 2026.

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Source: Cincodias



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