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Airbus takes new hit for A400M as core profit beats forecasts
[PARIS] European aerospace group Airbus took a new 1.2 billion euro (US$1.2 billion) charge for its troubled A400M military aircraft programme and called for new talks with European buyer nations to limit further financial damage, despite posting higher than expected core earnings and revenues for 2016.
The fresh charge for the A400M troop carrier brings the total for last year to 2.2 billion and the total since Europe's largest defence project was launched over a decade ago to more than 6 billion, due to persistent delays and cost overruns.
The company, reporting for the first time as Airbus and with a new financial format after ditching the Airbus Group brand in a revamp that recognises the dominance of its civil business, said "adjusted" operating income fell 4 per cent to 3.955 billion euros on revenues which rose 3 per cent to 66.581 billion.
A last-minute surge in civil jetliner deliveries last year, compensated for weaker helicopter and defence markets.
Analysts were on average expecting a 7.3 per cent drop in full-year operating earnings before one-offs to 3.83 billion euros on sales up 0.7 percent to 64.919 billion.
The A400M programme has weathered repeated industrial mishaps including the recent discovery of problems in an engine gearbox built by an Italian subsidiary of General Electric .
Airbus signalled a downgrade in its expectations for exports of the aircraft, which so far has only one buyer, Malaysia, beyond a bloc of seven European NATO nations led by Germany.
It also called for new talks with customer nations to limit further losses after receiving a 3.5-billion-euro bailout in 2010. "The board of Airbus has ordered management to re-engage with customers to cap the remaining exposure," a statement on Wednesday said.
The A400M is one of several pressing industrial and organisational issues facing Europe's largest aerospace group as it completes a sensitive reorganisation expected to cut 1,000 headquarters jobs.
On two broadly successful civil projects which have seen delays creep into the schedule in the past year, Airbus said the production ramp-up of its A350 and A320neo jets remained"challenging" but that bottlenecks in the A350 supply chain had improved and output targets remained on track.
Airbus said it expected more than 700 jetliner deliveries in 2017, up from 688 in 2016.
It did not give a target for orders but executives have said they will trail behind deliveries for the first time since 2009 as the aircraft market slows, following a multi-year order boom.