Tuesday, 11 March 2008

Financial losses for EADS

Europe’s leading aerospace group, EADS, the owner of the Airbus aircraft company, suffered a heavy financial loss last year, burdened by a weak US dollar and restructuring charges. They recorded a net loss of €446 million (£341 million) compared with a €99 million (£75 million) profit in 2006. They are expected to deliver more aircraft this year with delivering revenues of €40 billion (£30.3 billion), up from €39.1 billion (£29.6 billion) in 2007.

The aerospace group said it hoped to capture 700 aircraft orders in the current year and deliver 470 planes to customers. In 2007, EADS delivered 453 units to airlines, up from 434 in the previous year. Airbus however still suffered a €1 billion revenue hit from the weakening US dollar while profits were hurt by the cost of restructuring charges.

EADS chief executive, Louis Gallois, was optimistic, forecasting earnings before interest and tax of €1.8 billion (£1.36 billion) in 2008. Mr Gallois said “there had been a promising start to 2008 with improvements across the board and recent success in the US military aircraft market. EADS is gaining speed and altitude. Our short-term focus is now to further improve programme management and to secure the ramp-ups ahead."

The annual loss for EADS was higher than market expectations of some €320 million (£242.4 million). The Airbus business was affected by €881 million (£667.42 million) in provisions for restructuring and delays in the A380 and the A400M heavy lift aircraft. The A380 secured 33 new orders during the year making a total of 180 "firm orders" for the superjumbo aircraft. The Airbus order book stood at €283 billion (£214.39 billion) at the year end, up from €210 billion (£159 billion). (source: Timesonline)

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