Airbus Posts 2Q Net Loss; Still Can't Provide 2020 Guidance -- Update
July 30 2020 - 04:25AM
Dow Jones News
By Olivia Bugault
--Airbus posted a net loss of EUR1.44 billion
--The European plane maker trimmed A350 jets production rate to
five from six due to virus
--Airbus didn't provide guidance for the year because of low
visibility
Airbus SE Thursday said it swung to a net loss in its second
quarter and still can't give guidance for the year.
Net loss at the European plane maker was 1.44 billion euros
($1.70 billion) compared with net profit of EUR1.16 billion a year
earlier, while revenue fell 55% to EUR8.32 billion. Analysts
expected sales to come in at EUR8.31 billion, according to a
consensus estimate provided by FactSet.
Airbus's more closely watched adjusted earnings before interest
and taxes also swung to a loss of EUR1.23 billion.
"The impact of the Covid-19 pandemic on our financials is now
very visible in the second quarter, with first-half commercial
aircraft deliveries halving compared to a year ago," Airbus Chief
Executive Guillaume Faury said.
At the end of June, roughly 145 commercial aircraft couldn't be
delivered because of the public-health crisis, the company
said.
Airbus reported free cash outflow before merger and acquisition
and customer financing of EUR4.4 billion in its second quarter,
compared with cash outflow of EUR8.03 billion in its first
quarter--which included EUR3.6 billion in regulatory fines. The
group's ambition is to not consume cash before M&A and customer
financing in its second half, Mr. Faury said.
Mr. Faury reiterated that Airbus will continue to focus on
preserving cash as global airline traffic isn't expected to recover
to pre-pandemic levels until 2024, according to the latest forecast
from global trade group, the International Air Transport
Association.
Airbus had already announced a series of drastic cost-cutting
measures in a bid to weather the coronavirus crisis which is set to
have a yearslong effect on the aviation sector. Airbus in late June
said it would cut 15,000 jobs--or roughly 11% of its staff
world-wide--the biggest restructuring in its history. The aerospace
giant in April cut its production rate by roughly a third.
Its U.S. rival Boeing Co. on Wednesday said it plans another
production cut and will shrink its workforce after posting a net
loss of $2.4 billion in the second quarter.
Airbus Thursday said it has adjusted its widebody A350 monthly
production rate to five from six due to the market situation. The
company will progressively ramp up production once it has more
visibility and, by then, it will operate minor adjustments every
month, Mr. Faury said during a conference call. The demand for
widebody jets should take more time to recover, he said.
The Toulouse, France-based company--which is facing the "gravest
crisis the aerospace industry has ever known" as Mr. Faury
previously said--still didn't provide a guidance for 2020 because
of the lack of visibility.
"The recovery will be long and slow," Mr. Faury said during the
call.
Write to Olivia Bugault at olivia.bugault@wsj.com
(END) Dow Jones Newswires
July 30, 2020 04:10 ET (08:10 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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