Europe-based global giant aerospace group Airbus has reported a consolidated net loss of €481-million for the first quarter of this year (1Q20), in sharp contrast to its net income of €40-million during the same period last year (1Q19). The consolidated reported loss a share was €0.61 in 1Q20, in comparison to an earning a share of €0.05 a year before. Consolidated earnings before interest and taxes (adjusted) in 1Q20 were €281-million as against €549-million during 1Q19. Consolidated revenues were €10.6-billion, in comparison to 1Q19’s €12.5-billion.
“We saw a solid start to the year both commercially and industrially but we are quickly seeing the impact of the Covid-19 pandemic coming through in the numbers,” pointed out Airbus CEO Guillaume Faury. “We are now in the midst of the gravest crisis the aerospace industry has ever known. We’re implementing a number of measures to ensure the future of Airbus. We kicked off early by bolstering available liquidity to support financial flexibility.”
In March, the group secured a new €15-billion credit facility and a €2.5-million bond was issued, “partially terming out the €15-billion credit facility”. The 2019 dividend proposal was withdrawn and a voluntary top-up in pension funding was suspended. Over the coming quarters, Airbus would stay focused on preserving cash and reducing cash outflows. Expected capital expenditure for this year would be cut by some €700-million (to about €1.9-billion). Activities not essential to the continuity of the business nor to meet compliance and customer commitments would be deferred or suspended.
“We’re adapting commercial aircraft production rates in line with customer demand and concentrating on cash containment and our longer-term cost structure to ensure we can return to normal operations once the situation improves,” he affirmed. “At all times, the health and safety of Airbus’ employees is our top priority. Now we need to work as an industry to restore passenger confidence in air travel as we learn to coexist with this pandemic. We’re focused on the resilience of our company to ensure business continuity.”
The group had previously announced it was cutting its monthly commercial aircraft production rates to 40 for the A320 family, two for the A330 family and six for the A350 XWB family. In terms of orders, during 1Q20 net airliner orders were 290 (58 down on the figure for 1Q19), giving an order backlog (on March 31) of 7 650 commercial aeroplanes. Airbus Helicopters achieved net orders of 54 (as against 66 in 1Q19). Airbus Defence and Space won product and service orders worth €1.7-billion during 1Q20, including services related to military aircraft, the Phase 1A demonstrator contract for the European Future Combat Air Systems programme, and new telecommunications and connected intelligence contracts.
Airbus withdrew its guidance for 2020 in March. Because of the great uncertainty surrounding the effects of Covid-19, especially on deliveries, the group issued no new guidance.