Safran Reports Rise in Operating Profit
29 July 2016 - 4:00PM
Dow Jones News
LONDON—French aerospace supplier Safran SA Friday said
first-half operating profit rose 11.1%, propelled by strong demand
for new aircraft engines.
Operating profit was 1.3 billion euros ($1.4 billion) compared
with €1.2 in the year prior period. Sales in the January through
June period advanced 6.3% to €8.9 billion.
Safran reported a 25.9% decline in its adjusted net profit to
€862 million after the prior-year figure was bolstered by the
one-time gain from a disposal.
Strong demand for Airbus Group SE and Boeing Co. jetliners has
helped lift Safran's results. The French company makes engines and
other airliner equipment for some of the world's most popular
planes.
"Production rates of equipment and engines for
current-generation aircraft have never been higher," Safran chief
financial officer Philippe Petitcolin said. Operating income
reached a company record 14.6% of sales, he said.
Airbus this month delivered the first A320neo single-aisle jet
powered by Leap-1A engines made by a joint venture of Safran and
General Electric Co. Production of those engines is accelerating
quickly amid strong demand for the plane.
Mr. Petitcolin said "the challenge of the Leap ramp-up will
intensity" and that the company was "fully mobilized" to
deliver.
United Technologies Corp., which offers a rival engine for the
Airbus plane, struggled early to get engines delivered in the
proper configuration. Airbus has been stuck with more than 20
planes without engines as a result. United Technologies has said
the issue was being fixed and that engine deliveries would
accelerate to allow Airbus to meet this year's delivery target for
all A320neo planes using its turbine.
Safran confirmed its full-year guidance, including an increase
in sales at low-single-digit levels and a 5% increase in adjusted
recurring operating income. The company stuck to its plan to reach
break-even on shipments of Leap-1A engines before the end of this
decade.
Engine-related revenue, Safran's biggest business, delivered the
strongest growth at 8.3%, plane equipment sales rose 5.3% and
security sales rose 7.2%. Only defense sales declined, down
5.2%.
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
July 29, 2016 01:45 ET (05:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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