By Tim Hepher
PARIS -Airbus marked a turning point in its pandemic recovery with its first dividend in two years and higher profits from businesses including defence and space as the European group also confirmed a review of defence strategy on Thursday.
The world’s largest civil planemaker predicted higher profit and deliveries for 2022 but cautioned that supply chain tensions and a spike in inflation remained challenges for now.
“The pandemic is not yet fully behind us,” Chief Executive Guillaume Faury said while reiterating that the jet market would recover between 2023 and 2025.
“It has been clear that people want to fly again and do so as soon as restrictions are relaxed.”
The company, which also makes fighter jets and troop planes, also confirmed it was carrying out a review of its defence strategy after Reuters reported on Wednesday that its board was leading an exercise likely to open the door to more strategic partnerships.
Faury said that Airbus remains “committed to a strong position in defence” but declined to elaborate on the review, which he described as a regular exercise.
Airbus ended a two-year dividend drought after swinging to a record net profit of 4.213 billion euros ($4.8 billion) in 2021, boosted by the end of production of its A380 superjumbo and a partial reversal of earlier COVID-19 charges.
The company proposed a dividend of 1.50 euros per share.
Shares in Europe’s largest aerospace company dipped 0.5% against a fractionally stronger market.
Analysts said the results beat profit expectations, though some were disappointed that the company was predicting stable cashflow in 2022 after a sharp turnaround to 3.5 billion euros generated last year from a negative 6.8 billion euros the previous year.
Jefferies analysts said “conservatism is typical” for the first forecast of the year, but they noted that the stable forecast stood in contrast to higher deliveries and earnings.
Airbus predicted 720 deliveries in 2022, up from 611 last year, and adjusted operating profit of 5.5 billion euros. The closely watched profit figure soared to 4.865 billion euros in 2021 from 1.706 billion a year earlier as revenue rose by 4%.
The company’s net cash rose more than 75% to 7.6 billion euros, on its way back to a pre-crisis level of 12.5 billion euros.
Airbus earnings were boosted by 274 million euros clawed back from money previously set aside for the closure of Europe’s largest building, the A380 production plant in Toulouse, which will now be used to assemble in-demand narrowbody planes.
The company reaffirmed plans to lift narrowbody production to 65 planes a month by the summer of next year, from about 45 now, but some analysts said it signalled a slightly softer tone on its ambitions to raise that to as high as 75 a month by 2025.
Faury said that Airbus expects a decision by mid-year, adding that the supply chain would be the main factor rather than demand, on which Airbus is more confident.
Airbus has been at odds with sceptical engine makers and some leasing companies over the plans, and some senior industry sources say that the Omicron coronavirus variant means all parties may in practice be willing to let a decision drift by a few months.
The reversed A380 charge almost halves a bill of 463 million euros announced when Airbus halted production of the world’s largest jetliner because of a shift in demand towards smaller jets. The last A380 was delivered in December to Dubai’s Emirates.
On the negative side, Airbus took another charge of 212 million euros on the A400M military airlifter, adding to billions written off on Europe’s largest defence project.