Airbus Raises 2021 Cash Flow, Earnings Targets; Adjusts Production Ramp-Up Plans -- 2nd Update
October 28 2021 - 6:33AM
Dow Jones News
By Olivia Bugault
Airbus SE on Thursday raised its free cash flow and earnings
guidance for the year despite lower sales in the third quarter, and
confirmed plans to ramp-up production with some adjustments.
The European plane maker said Thursday that it now expects
adjusted earnings before interest and taxes at around 4.5 billion
euros ($5.22 billion) for the year, and is targeting free cash flow
before mergers and acquisitions and customer financing at roughly
EUR2.5 billion.
Airbus previously raised its outlook in July, when it guided for
adjusted EBIT of EUR4 billion and free cash flow of EUR2
billion.
The company on Thursday maintained its target of 600 commercial
jet deliveries for the year. Over the first nine months of 2021,
Airbus delivered 424 aircraft.
The guidance upgrade is good news as Airbus is now expecting
earnings to be 12.5% higher this year for the same number of
deliveries, implying increased profitability, Citi said.
The updated outlook comes as Airbus swung to a net profit of
EUR404 million in the third quarter, from a net loss of EUR767
million in the same period a year earlier. Revenue fell 6% to
EUR10.52 billion on the back of lower plane deliveries. Airbus
delivered 127 commercial aircraft in the quarter, 18 fewer than
during the same period last year.
Airbus's more closely watched adjusted earnings before interest
and taxes fell 19% on-year to EUR666 million, but was 7% above
market expectations, Citi said.
The company also updated its production ramp-up plans after it
said in May that for its A320 family of narrow-body jets it was
targeting a monthly production rate of 45 in the fourth quarter of
2021 and 64 by the second quarter of 2023. Airbus is now working to
step up production to 65 a month by the summer of 2023 for its A320
family, it said.
Demand supports Airbus's planned output ramp-up, Chief Executive
Guillaume Faury said during a call with journalists. Mr. Faury
added that the company is still studying a potential increase in
the production of A320 family jets to up to 75 a month by 2025.
Regarding the production rate of its widebody jets, Airbus said
that "the recent commercial successes of the A330 program enable a
monthly rate increase from around 2 to almost 3 aircraft at the end
of 2022." The company stuck to its plan to increase the output of
its A350 wide-body jets to 6 a month from 5, though it should now
happen in early 2023 and not by the autumn of 2022 as previously
said.
During the call, Mr. Faury also said the company is dealing with
delays from a small number of suppliers, issues that affect
deliveries but not the output ramp-up.
Air traffic is recovering in Europe and world-wide thanks to
short-haul and leisure flights, but long-haul travel is still
lagging behind as some countries are slower to reopen borders.
Airbus still expects air traffic to return to 2019 levels between
2023 and 2025, Mr. Faury said.
At 1001 GMT, Airbus shares were up 1.2% at EUR111.30.
Write to Olivia Bugault at olivia.bugault@wsj.com
(END) Dow Jones Newswires
October 28, 2021 06:18 ET (10:18 GMT)
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