Airbus Reports a Loss and Conservative Guidance
Airbus reported an operating loss of €510 million ($616.3 million) for 2020 as a result of charges from earlier quarters, particularly the restructuring business strategy and the termination of the unprofitable A380 program.
Amid all the challenges it faced, the company was also forced to slash €100 billion ($120.5 billion), or 20% off the value of its unfilled order book to €373 billion ($450.6 billion).
“The 2020 results demonstrate the resilience of Airbus in the most challenging crisis to hit the aerospace industry. I want to thank our teams for their great achievements in 2020 and acknowledge the strong support of our Helicopters and Defence and Space businesses. I would also like to thank our customers, suppliers and partners for their loyalty to Airbus,” said Guillaume Faury, the Chief Executive Officer of the company.
The operating profit fell 75% to €1.7 billion ($2.05 billion) for the company on an adjusted basis as weak carrier demand sent revenues falling by 29% to €49.9 billion ($60.3 billion). Moreover, the air business projects to record an adjusted operating profit of €2 billion ($2.41 billion) for the ongoing year.
“Many uncertainties remain for our industry in 2021 as the pandemic continues to impact lives, economies and societies. We have issued guidance to provide some visibility in a volatile environment. Over the longer term, our ambition is to lead the development of a sustainable global aerospace industry,” Faury added.
Due to the challenging environment, the company said it expects to deliver a minimum of 566 units in 2021. The business delivered the same amount of planes in 2020, which is around 40% lower than the all-time peak.
The air business giant forecasted disappointing deliveries this year and slashed its dividends once again as it prepares to face more challenges due to coronavirus. The COVID-19 pandemic has battered air travel last year and is expected to cause uncertainty in 2021 as well.
CEO Faury said that the forecast should grant investors some clarity. He added that the actual number of deliveries mostly depends on demand from airline companies instead of supply chains and funding.
Airbus’s biggest rival, Boeing, is yet to report its own forecast for this year. The American aerospace business giant has undergone an additional crisis after its 737 MAX plane was grounded due to two fatal crashes.
Airbus stock dropped about 3.5% in Thursday’s trading session as investors were disappointed with the provided delivery guidance by the France-based company.
Aerospace business titan Airbus reported a loss for 2020 and issued a weak deliveries forecast for this year as the coronavirus-induced uncertainty continues in 2021.