EADS has warned that its Airbus subsidiary’s new passenger jet programme “remains challenging”, as it reported a strong increase in underlying earnings for 2012.
The pan-European aerospace and defence company posted a rise in earnings before interest, tax and exceptional items to €3 billion in 2012, compared with €1.8 billion in 2011. But one-off charges related to the A350, Airbus’s planned wide-body passenger jet, weighed on net income.
The A350 has already suffered delays on its proposed entry into commercial service, which is now scheduled for the second half of 2014, and some analysts regard this programme as the most significant threat to improvements in profitability at EADS.
EADS’s earnings have been hit in previous years by problems with other programmes, including the A380 superjumbo. Its main rival, Boeing, is reeling after its 787 Dreamliner, the main alternative to the A350, was grounded by regulators in January because of safety concerns.
EADS said the A350 programme was a potential source of one-off charges in 2013, together with the A380, because Airbus is having to fix a wing cracking problem on the superjumbo. EADS reported revenues of €56.5 billion for 2012, up 15 per cent on 2011. Net income increased 19 per cent to €1.2 billion.
The company recorded free cash flow of €1.3 billion in 2012, up 30 per cent, after a strong fourth quarter. Net cash stood at €12.3 billion at December 31st, compared with €11.7 billion the year before.
The first nine months of 2012 had involved a poor cash performance at EADS, but this was partly rectified by Airbus – its largest subsidiary – hitting its target of delivering 30 A380s to customers last year.
Tom Enders (left), EADS chief executive, said: “Going forward, the focus on bottom-line growth remains our priority.” – (Copyright The Financial Times Limited 2013)
