Airbus H12024 net income drops 46% on space biz impact

Airbus reported a 46 percent decline in net income at €825 million for the first six months of 2024 compared to €1.5 billion in the first half of 2023 on "challenges in space business."

Revenue increased four percent to €28.8 billion from €27.7 billion in H12023, says an official release.

Higher revenus reflects the number of commercial aircraft deliveries and a higher volume in the air power business of Airbus Defence and Space, the release added. "A total of 323 commercial aircraft were delivered (H1 2023: 316 aircraft), comprising 28 A220s, 261 A320 Family, 13 A330s and 21 A350s. Airbus Helicopters’ deliveries totalled 124 units (H1 2023: 145 units) with revenues broadly stable year-on-year, reflecting a solid performance, notably in services. Revenues at Airbus Defence and Space increased seven percent, mainly driven by the Air Power business, partly offset by the recent update of estimates at completion assumptions in Space Systems. Four A400M military airlifters were delivered in H1 2024 (H1 2023: 3 aircraft)."

Guillaume Faury, Chief Executive Officer, Airbus says: "The half-year financial performance mainly reflects significant charges in our space business. We are addressing the root causes of these issues. In commercial aircraft, we are focused on deliveries and preparing the next steps of the ramp-up, while addressing specific supply chain challenges and protecting the sourcing of key work packages.”

The A220 ramp-up continues towards a monthly production rate of 14 aircraft in 2026 with a focus on the programme's industrial maturity and financial performance, the release added. "In addition, on June 24, 2024, in line with agreements in place and as planned, the company and Investissement Québec agreed to provide shareholder financing for the Airbus Canada partnership. As announced in June 2024, the A320 Family ramp-up trajectory has been adjusted to reflect specific supply chain challenges. The production rate of 75 A320 Family aircraft per month is now expected in 2027. The A321XLR powered by CFM engines received its Type Certification from the European Union Aviation Safety Agency (EASA) earlier in July. Entry-into-service is expected at the end of the summer 2024. On widebody aircraft, the company continues to target a monthly production rate of four A330s in 2024 and 12 for the A350 in 2028."

Adjusted EBIT at Defence and Space totalled €-807 million (H1 2023: €78 million), reflecting the €989 million of charges, mainly linked to the updated estimates at completion in space systems, the release added.

"Consolidated free cash flow before customer financing was €-529 million (H1 2023: € 1,635 million), mainly driven by the change in working capital which includes the planned inventory build-up to support the ramp-up plan."

Outlook
The company’s 2024 guidance, before M&A, is around 770 commercial aircraft deliveries, adjusted EBIT of around €5.5 billion, and free cash flow before customer financing of around €3.5 billion.