A321neo Calc 1

Corruption and the bottomless pit of the A400M devastate Airbus accounts

Airbus registers losses of 1,362 million euros. However, it raises the dividend by 9% after firing the turnover to 70,000 million

Single aisle Airbus models. Photo: Airbus.

Corruption investigations in the United States, France, and the United Kingdom, along with new provisions for the military transport aircraft A400M, they have been very expensive to Airbus.

The European manufacturer lost 1,362 million euros in 2019, after being forced to allocate 3,600 million euros to face legal disputes and provision 1,200 million because of the A400M.

It has been of little use to Airbus Delivering a record 863 aircraft last year, which has triggered its turnover to 70,478 million euros, 11% more.

It has been noted that the Boeing crisis has revitalized its turnover. But in the end, the corruption cases and the bottomless pit of the military plane have wiped out the profit and loss account.

The high part of the account has not worked badly, according to the sources consulted. Revenue growth has left the net operating profit (adjusted ebit) with an increase of 19%, to 6,946 million euros. This figure exceeds the 6.830 million expected by the consensus of analysts from Bloomberg.

The problem is that, from here, you have to subtract the 1,200 million for the charges associated with the A400M, which has already eaten more than 10,000 million euros since its birth, and the 3,600 million provisioned to avoid lawsuits. Specifically, for having hired intermediaries who paid or promised commissions in exchange for contracts.

Dividend grows 9% despite losses

Despite the bulging red numbers, the managers of Airbus They had no problem proposing the distribution of a dividend of 1.8 euros per share, which represents an increase of 9% compared to last year, when the aircraft manufacturer earned 3,054 million euros.

Regarding the projections it has offered Airbus, the company has set a goal of delivering 880 commercial aircraft in 2020, as long as the coronavirus crisis does not impact the market or change the expansion forecasts in air traffic.

Buys Bombardier’s stake in A220 aircraft

It has also transpired that Airbus and the Quebec Government have reached an agreement to buy the participation of the Canadian manufacturer Bombardier in the A220 aircraft program, controlled by Airbus since the summer of 2018. Thus, the European manufacturer will have 75% of the participation in the A220, for 25% the Government from Quebec.

This part in the hands of the authorities of Quebec it could be owned by Airbus in 2026, three years earlier than originally planned when Airbus took control. The transaction redoubles Airbus’ commitment to a 100-150 seat model, a capacity below most of its A320 family aircraft and Boeing’s 737 Max line.