Business

Airbus owner EADS reports strong profits

  • 27 February 2013
  • From the section Business
An Airbus A380
Image caption EADS pointed to a strong performance from its Airbus business

Aerospace and defence group EADS has reported a rise in profits and sales in 2012, boosted by a strong performance from its aircraft maker Airbus.

Net profit for 2012 at EADS rose 19% to 1.23bn euros ($1.61bn; £1.06bn). Revenues rose 15% to 56.48bn euros.

Revenues at Airbus rose 17% to 38.59bn euros, mostly due to commercial sales.

However, EADS's profit in the fourth quarter fell sharply after taking one-off charges at its helicopter and defence electronics divisions.

Net profit in the three months to December fell 47% from a year ago to 325m euros.

This was after a 198m-euro hit at its defence electronics contractor Cassidian due to restructuring costs, and a 100m-euro charge at Eurocopter after renegotiating contracts with government customers.

Looking ahead, EADS said its focus was on growing profits, adding there was "still some way to go to meet our profitability targets".

For 2013, it is targeting an operating profit of 3.5bn euros and expects to see "moderate growth" in revenues, though results will be affected by problems with its A350 XWB model.

Shares in EADS rose more than 7% in lunchtime trading in Paris.

Focus on deliveries

In 2012 the group's order intake showed "continuing commercial momentum across the EADS portfolio", the firm said.

At the end of 2012, its order book had increased by 5% to 566.5bn euros.

The bulk of that came from Airbus. Its order book increased 6% to 523.4bn euros, although it took fewer orders in 2012 than the year before.

"A strong focus on deliveries helped to significantly improve cash generation during the fourth quarter," said chief executive Tom Enders in a statement.

"Going forward, the focus on bottom line growth remains our priority number one as a management team."

Last month, rival Boeing also reported a sharp rise in profits, thanks in part to stronger sales of commercial planes.

A350 delays

Earlier this month, Airbus said it would not use lithium-ion batteries in its forthcoming A350 plane because of problems that have grounded Boeing's 787 Dreamliner.

International regulators grounded all 787 Dreamliners in January so that safety checks could be carried out on their batteries after incidents on a Japan Airlines plane and an All Nippon Airways plane.

Investigations into the battery have so far proved inconclusive.

Airbus's A350, which was intended to challenge the Dreamliner, has been delayed because of a problem with its wings.

"The A350 XWB programme remains challenging," EADS said. "Any schedule change could lead to increasingly higher impact on provisions."

EADS also invited shareholders to an extraordinary meeting on 27 March to approve its new governance structure and a share buyback programme for up to 15% of its stock.

Last year, the group announced sweeping governance changes that will result in Germany and France eventually holding equal stakes in EADS of about 12%, and Spain holding 4%.

This followed the collapse of a proposed merger between EADS and BAE Systems after political deadlock between the UK, French and German governments.

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