Airbus rebounds to record profits as it strikes upbeat note on recovery

The Toulouse-based company aims to increase production of its A320 to 65 jets a month by mid-2023

Airbus made record profits last year and restored its dividend as the European aerospace group struck an optimistic note about prospects for a sustained rebound in the aviation industry.

The Toulouse-based company also raised its delivery forecast for the coming year, saying it expected to dispatch 720 commercial aircraft, up from the 611 it handed over to customers in 2021.

Despite the manufacturer's strong rebound, Airbus chief executive Guillaume Faury cautioned that the "pandemic is not yet behind us".

Company executives were still seeing tensions on “supply, logistics and labour”, Mr Faury said on a news call, although he reiterated he expected the market to fully recover between 2023 and 2025.

The company reported a record net profit of €4.2 billion, driven by a rise in sales of commercial aircraft and higher earnings in its defence and helicopter divisions.

The result was boosted by a series of adjustments, including halting its A380 superjumbo programme and a reversal of Covid-19 charges.

As a result Airbus said it would propose a dividend of €1.50 a share, its first payout to shareholders in two years. The last annual dividend of €1.65 was in 2019.

The group’s adjusted operating profit, a figure tracked by analysts, soared to €4.86 billion from €1.7 billion a year earlier. Revenues rose 4 per cent to €52.1 billion, mainly reflecting a higher number of commercial aircraft deliveries.

“2021 was a year of transition where our attention shifted from navigating the pandemic towards recovery and growth,” Mr Faury said. “Record net income and our efforts to strengthen the net cash position underpin our proposal to reintroduce dividend payments going forward.”

The company said it was targeting adjusted operating profit of €5.5 billion and free cash flow of €3.5 billion before mergers and acquisitions for this year, about equal to 2021.

Targets

Airbus also stuck to its targets to increase production of its single-aisle A320 family to 65 jets a month by the summer of 2023.

The aircraft-maker faces a difficult balancing act trying to rally suppliers that have been battered by the pandemic to increase production, while meeting recovering demand from customers.

A shortage of workers and materials such as computer chips have fuelled concerns over whether the supply chain is able to meet some of Airbus’s more aggressive plans for narrow-body production beyond 2023. The company previously said it was looking at scenarios of 70 jets a month by the first quarter of 2024 and 75 a month by 2025.

Mr Faury said the company expected to take a decision on rates beyond 2023 by the middle of this year. – Copyright The Financial Times Limited 2022

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