By Robert Wall
MUNICH-- Airbus Group NV on Friday said it would boost
production of its popular A320 single-aisle jet as Europe's largest
plane maker reported a 59% rise in profit for last year despite
problems with a big military aircraft program.
Net income was EUR2.3 billion ($2.6 billion), the Toulouse,
France-based company said, compared with EUR1.5 billion a year
earlier when earnings were weighed down by costs linked to the new
A350 long-range jet that entered service in January. Sales in the
period rose 5% to EUR60.7 billion.
"We achieved a significant improvement in profitability cash
generating in 2014 thanks to a record order book and strong
operational performance in most areas," Chief Executive Tom Enders
said.
Airbus said it would hike output of the A320 plane to 50 jets a
month starting in 2017. The world's second-largest plane maker,
which currently builds 42 of the planes a month, had already
planned to reach a monthly production rate of 46 narrowbodies next
year.
Airbus, which builds the A320 jetliner in Hamburg, Toulouse,
Tianjin in China and is setting up a final assembly line in Mobile,
Alabama, had an order backlog of 5,099 narrowbody planes at the end
of January.
Airbus and larger rival Boeing Co. have enjoyed a surge of
orders for new planes as airlines seek growth and look to replace
less efficient models with more efficient jets. Boeing, which makes
42 of its single-aisle jets each month, is raising output of its
737 planes to 52 units a month staring in 2018.
The European plane maker also further cut output of its A330
widebody plane to six planes a month from 2016. Airbus builds 10 of
the planes now and was reducing output to nine planes later this
year as demand for the current model dries up while the plane maker
works on an updated version. The updated model, called the A330neo
for "new engine option," is due for its first delivery in late
2017.
Airbus expects commercial plane deliveries this year to rise,
including production of 15 of the new A350 long-range jets and 30
A380 superjumbos. Earnings per share and dividends are also set to
increase, it said. Free cash flow should reach break-even, it
said.
Earnings were negatively impacted by EUR551 million on renewed
problems in building the A400M military transport plane that
previously weighed on results when it fell years behind schedule
and ran massively over cost. The issues caused Airbus to replace
the head of its military aircraft programs last month.
Airbus builds the A400M for eight customers, though deliveries
have been marred by delays and technical defects. Airbus said it is
in talks with A400M customers about delivery plans and how to
enhance the aircraft's features beyond the basic transport
capabilities it now performs. The company this year is hoping to
ramp up sales campaigns to secure additional orders for a program
that remains unprofitable.
Earnings this year also benefited from one-off issues, including
EUR383 million in gains associated with the sale of 8% if the
company's holdings in French combat jet plane maker Dassault
Aviation SA and Finish defense company Patria.
The company proposed a record dividend of EUR1.20 a share its
order book also reached an all-time high of EUR857.5 billion.
Write to Robert Wall at robert.wall@wsj.com
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