AviTrader MRO Magazine 2017-11


AviTrader MRO Magazine 2017-11

Finance News


Boeing reports third-quarter revenues of US$24.3bn

The Boeing Company has reported third-quarter revenue of US$24.3bn,

with GAAP earnings per share of $3.06 and core earnings per share

(non-GAAP) of US$2.72, reflecting strong deliveries, services and delivery

mix, and overall solid execution.

The company’s cash flow guidance is increased to US$12.5bn from

US$12.25bn, driven by improved performance. Full year EPS guidance

is increased to between US$11.20 and US$11.40 from US$11.10

and US$11.30 and core earnings per share (non-GAAP) guidance

is increased to between US$9.90 and US$10.10 from US$9.80 and

US$10.00 driven by a lower-than-expected tax rate. Commercial Airplanes

third-quarter revenue was US$15.0bn on planned production

rates and delivery mix. Third-quarter operating margin increased to

9.9%, reflecting higher 787 margins and strong operating performance

on production programs, partially offset by additional cost growth of

US$256m on the KC-46 Tanker program due to incorporating changes

into initial production aircraft as the company progresses through latestage

testing and the certification process.

During the quarter, Commercial Airplanes delivered a record 202

airplanes, including 24 737 MAX 8 airplanes. The production rate increased

to 47 per month on the 737 program, and Boeing has confirmed

plans to increase the 787 production rate to 14 per month in

2019. Development on 777X is on track as production has begun on

the first complete wing for structural test.

Commercial Airplanes booked 117 net orders during the quarter. Backlog

remains robust with nearly 5,700 airplanes valued at US$412bn

Safran reports strong sales for third quarter and first nine

months 2017

Safran’s reported third-quarter 2017 adjusted revenue was €3,815m,

up 8.5% on a reported basis year-on-year. Adjusted revenue increased

11.3% on an organic basis. Adjusted revenue in the first nine months of

2017 was €11,853m, an increase of 3.0% on a reported basis, up 5.1%

on an organic basis, compared to 2016. In the third-quarter 2017, civil

aftermarket increased 14.5% in USD compared to 2016 driven notably

by service activity and spare parts for CFM56 engines. In the first

nine months of 2017, civil aftermarket grew 10.4% in USD. (€1.00 =

US$1.18 at time of publication.)

IAG reports another strong quarter with operating profit

up 20.7%

International Consolidated Airlines Group (IAG) presented Group consolidated

results for the nine months to September 30, 2017. The Group

posted third-quarter operating profit of €1,455m before exceptional

items (2016: €1,205m). Passenger unit revenue for the quarter was

up 0.7%, up 2.2% at constant currency. Operating profit before exceptional

items for the period of nine months to September 30, 2017 was

€2,430m (2016: €1,915m), up 26.9%. Cash of €7,523m at September

30, 2017 was up €1,095m on 2016 year end. Adjusted net debt to

EBITDAR improved by 0.4 to 1.4 times. Willie Walsh, IAG Chief Executive

Officer, said: “We’re reporting another strong quarter with an operating

profit up 20.7 percent to €1,455 million before exceptional items.

All our companies performed well. Passenger unit revenue was up 2.2

percent at constant currency boosted by improvements in the Spanish

and Latin American markets. Our commercial performance was good

despite underlying disruption from severe weather and terrorism. IAG

Cargo improved in the quarter due to stronger Asia Pacific demand

compared to last year.”

Embraer posts third-quarter net income of US$110m

During the third quarter 2017, Embraer delivered 25 commercial jets

and 20 executive jets (13 light and 7 large). The Company’s firm order

backlog at the end of the third quarter was US$18.8bn, representing an

increase from the US$18.5bn reported at the end of 2Q17. Consolidated

revenues were US$1,310.4m, representing a decline of 13.5%

compared to the third quarter in 2016, due to lower deliveries in the

Commercial Aviation and Executive Jets segments. Adjusted EBIT and

Adjusted EBITDA margins were 5.3% and 10.9%, respectively. Adjusted

EBIT and Adjusted EBITDA exclude US$3.6m in net non-recurring

charges in the third quarter 2017. Net income attributable to Embraer

shareholders and Earnings per ADS were US$110.0m and US$0.60,

respectively. Adjusted Net income (excluding the impact of FX-related

non-cash deferred income tax and social contribution and non-recurring

items) for the quarter was US$75.2m, representing Adjusted Earnings

per ADS of US$0.41. Embraer expects 2018 to be a transition year

due to the entry into service of the first E2 model, the E190-E2, combined

with a still flattish market for Executive Jets and Defense & Security.

In this transition scenario of ramp-up costs for the initial E2 deliveries,

the Company releases 2018 Outlook for total revenues of US$5.3 to

US$6.0bn, with deliveries of 85 to 95 jets in Commercial Aviation and

105 to 125 jets in Executive Jets. Consolidated EBIT margin is expected

to be within a range of 5.0% to 6.0%, and Guidance for Free Cash Flow

is for a usage of US$150m or better for 2018.

Zeitfracht and Nayak take over airberlin maintenance unit

airberlin’s maintenance unit, has been acquired by family-owned Zeitfracht

and maintenance group Nayak, for a sum as yet undisclosed. This

should save approximately 300 jobs. Zeitfracht is also buying Air Berlin’s

cargo marketing unit. The remaining 550 maintenance employees who

will not be going to Zeitfracht will be taken on by a so-called ‘transfer

company’ which will take on a total of approximately 1,200 redundant

Air Berlin ground handling staff and will subsequently look to source

new employment opportunities for them. This figure is still appreciably

lower than the 4,000 staff unions had hoped would be taken care of.

MTU Aero Engines presents nine-month results and raises

earnings forecast

In the first nine months of 2017, MTU Aero Engines AG saw its revenues

increase by 10% to €3,745.4m (1-9/2016: €3,401.3m). The group’s

operating profit increased by 14% from €393.8m to €450.6m, improving

the EBIT margin from 11.6% to 12.0%. Earnings after tax rose by

17% to €320.4m (1-9/2016: €273.4m). “Based on these results and the

positive effects on earnings that we now expect to derive from our product

mix, we are able to raise our earnings forecast for this year,” said

Reiner Winkler, CEO of MTU Aero Engines AG. “By year-end, we now

expect adjusted EBIT to grow to around €600m and net income to reach

around €420m.” MTU’s original forecast was adjusted EBIT of around

€560m (2016: €503.0m) and adjusted net income of around €390m

(2016: €345.4m). MTU has aligned its revenue forecast to reflect exchange

rate changes and now expects to generate revenues of around

€5.1bn instead of around €5.3bn (2016: €4.7327bn).

AviTrader MRO - November 2017

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