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Earnings at European aerospace group Airbus fell in 2016 but came in just above expectations as the company booked further charges on production of its A400M military transport aircraft.
Fourth-quarter earnings before interest, tax and exceptionals came to €1.54bn, above a €1.46bn median forecast from economists surveyed by Bloomberg and up 11 per cent from 2015. That brought annual revenue to €67bn, up 3 per cent from 2015.
That brought earnings before interest, tax and exceptionals for the full year came to €3.96bn, just above expectations of €3.8bn but well down from the previous year’s €4.1bn.
The fourth quarter saw the company book a further charge of €1.2bn on the A400M programme, which brought total charges on that programme to €2.2bn for the year. Together with other adjustments, including restructuring costs incurred as the company worked to merge its commercial jet arm and parent group, that brought net adjustments for 2016 to minus €1.7bn.
However annual deliveries of its popular A350 long-range passenger jet ramped up to 49, roughly in line with a full-year target of 50 aircraft after the programme booked a €385m charge in the second quarter.
Chief executive Tom Enders said:
We have delivered on the commitments that we gave a year ago and achieved our guidance and objectives, with one exception, the A400M, where we had to take another significant charge totalling 2.2 billion euros in 2016. … We are taking additional steps to increase efficiency through the integration project, while investments in digital transformation will further improve our competitiveness. Overall, the progress we made last year gives us confidence that we have the building blocks in place to achieve our earnings and cash flow growth potential.
Earnings per share came to €1.29 in 2016, down from €3.43 in 2015. The company said its board would propose a dividend of €1.35 per share at its annual general meeting in April, up about 4 per cent from the previous year.
Ahead of earnings analysts at sell-side research and brokerage firm Bernstein wrote:
We expect 2017 to be a challenging year, with weak cash flow (but, above 2016 levels) and program hurdles to cross. The A350 needs to fix its supply chain problems, primarily with interiors. The A320neo needs Pratt engine deliveries to stay on schedule, although LEAP deliveries appear solid. Free cash flow should be just above breakeven in 2016 and slightly higher in 2017, with the real increases in 2018-19. FX should provide an additional tailwind