Tuesday 16 April 2024

Guillaume Faury

Airbus profits dip 11pc despite record-breaking order intake

AMSTERDAM, February 15, 2024

Global aviation major Airbus doubled its order intake value in 2023, with record-breaking orders including India's IndiGo ordering 500 Airbus A320neo family aircraft.
However, the company reported a lower net profit in 2023 than in 2022, with its net income going down 11% to €3.7 billion ($3.9 billion), despite revenues growing 11% to €65.4 billion ($70.1 billion). 
Free cash flow (FCF) was also lower, with the manufacturer noting that its FCF was €3.8 billion, compared to €4.3 billion compared to a year prior.
Positive earnings
On a positive note, all of its business segments ended the year with positive earnings before interest and taxes (EBIT), which was not the case a year prior, when the Defence and Space division’s EBIT was -€118 million. In 2023, the manufacturer’s Defence business reported an EBIT of €220 million.
The manufacturer delivered 735 aircraft in 2023, with positive earnings across all business segments. Despite lower net profit and free cash flow compared to the previous year, Airbus remains optimistic about delivering around 800 aircraft in 2024, although supply chain limitations may persist.
Airbus has announced its full-year 2023 results, with the manufacturer’s chief executive reiterating that despite a complex operating environment, it managed to record strong order intake and deliver on its commitments throughout the year.
Doubling order intake value
Commercially, the plane maker had a very successful year, booking record-breaking orders, which includes India’s IndiGo ordering 500 Airbus A320neo family aircraft. Overall, its order intake more than doubled, from €82.5 billion in 2022 to €186.4 billion.
During the year, it booked 2,319 gross orders, which were reduced to 2,094 net orders following cancelations. In comparison, its gross and net orders were 1,078 and 820 aircraft a year prior, respectively. At the end of 2023, its commercial aircraft backlog stood at 8,598 aircraft.
Airbus’ Helicopters and Defence and Space order intakes grew as well, with the manufacturer noting that its Helicopters division registered 393 net orders (362 in 2022). Meanwhile, the Defence and Space subsidiary’s order intake by value increased from €13.7 billion to €15.7 billion by the end of the last year.
The European plane maker delivered 735 aircraft in 2023. The deliveries are split between 68 A220, 571 A320, 32 A330, and 64 A350 family aircraft. A year prior, it delivered 661 aircraft, excluding two Aeroflot A350-900s, which the manufacturer was unable to hand over due to sanctions imposed on Russia after the country began its war in Ukraine.
Global industrial system
Commenting on the results, Guillaume Faury, the chief executive officer (CEO) of Airbus, highlighted that the manufacturer was able to record a strong order intake and deliver on its commitments despite the complex operating environment. During the company’s analyst call to present its 2023 results, Faury detailed that the difficult environment included supply chain challenges and geopolitical tensions, which had affected Airbus last year.
“We will continue to invest in our global industrial system, while progressing on our transformation and decarbonisation journey. Our dividend proposals are a reflection of the strong 2023 financials, our growth prospects in 2024 and balance sheet strength.”
Looking forward, Airbus said that in 2024, it expects to deliver around 800 aircraft or 65 more than in 2023. However, Faury admitted that the supply chain has been a limiting factor over the past few years, and the CEO expects the situation to continue going forward.
Airbus’ provided guidance was based on no additional disruptions to the economy, air traffic, supply chain, the company’s internal operations, and its ability to deliver products and services during the year. As such, the European aircraft manufacturer’s provided guidance was carefully assessed, with Faury mentioning that it was a “sweet spot,” the best balance between demand and the ability of its supply chain to deliver while still maintaining the highest safety standard in our industry.
Airbus also provided guidance for its EBIT and FCF, with the manufacturer stating these to be between €6.5 billion and €7 billion and €4 billion, respectively. As such, both EBIT and FCF should grow significantly in 2024.
Airbus SE (stock exchange symbol: AIR) reported consolidated Full-Year (FY) 2023 financial results and provided guidance for 2024.
The Board of Directors will propose the payment of a 2023 dividend of €1.80 per share (2022: €1.80 per share) and a special dividend of €1.00 per share to the 2024 Annual General Meeting taking place on April 10 2024. The proposed payment date is April 18 2024.--TradeArabia News Service


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