Airbus Group SE’s earnings fell 3.6 percent last year as a late surge in aircraft deliveries failed to offset costs from ramping up output of the A350 twin-aisle model and the impact of engine glitches that curbed handovers of the latest A320 narrow-body.
Earnings before interest and tax before one-time items dropped to 3.96 billion euros ($4.2 billion) in 2016 from 4.11 billion euros a year earlier, Toulouse, France-based Airbus said in a statement Wednesday. Analysts had predicted a profit of 3.80 billion euros, the average of 15 estimates.
Airbus met its goal of achieving positive free cash flow after delivering 266 planes in the final quarter, or two-fifths of the annual total. Still, 85 percent of the single-aisle jets handed over were older variants after issues with a Pratt & Whitney engine slowed production of the higher-margin Neo model. Lifting A350 output also came at a cost amid a shortage of interior fittings.
Airbus, which had forecast that 2016 Ebit would be little changed, excluding one-time items, disposals and customer financing, also booked charges of 2.2 billion euros against delivery delays afflicting the A400M military-transport plane, up from 1.03 billion euros in the first half.
“’We have delivered on the commitments that we gave a year ago and achieved our guidance and objectives, with one exception, the A400M, where we had to take another significant charge,” Chief Executive Officer Tom Enders said in the release.
Adjusted Ebit should show a gain in the mid-single-digit percentage range this year, excluding mergers and acquisitions, Enders said, reiterating that Airbus expects to deliver more than 700 commercial aircraft.
The company sold some of its defense activities last year and spent more on financing after European agencies suspended export-credit assistance amid a bribery probe begun by the U.K. Serious Fraud Office. Its cash flow for the year stood at 1.4 billion euros, reversing a figure of negative 4.73 billion euros through nine months following the fourth-quarter delivery jump.
Enders has broken down barriers between Airbus’s group structure and the commercial jetliner arm, making the division’s chief Fabrice Bregier his effective No. 2 as chief operating officer for the whole company.
