By Siddharth Philip
Airbus SE reported a drop in first-quarter profit as the European planemaker paid a price for stubborn gaps in its supply chain that have held back jet deliveries.
Airbus SE reported a drop in first-quarter profit as the European planemaker paid a price for stubborn gaps in its supply chain that have held back jet deliveries.
Adjusted earnings before interest and taxes fell to €773 million ($854 million) from €1.26 billion in the first three months of 2022, Airbus said in a statement. Sales dipped to €11.8 billion from €12 billion. The manufacturer stood by its full-year targets for cash flow and aircraft deliveries, though the company pushed back the entry into service date of its A350 freighter version by a year to 2026.
The world’s largest planemaker has struggled to meet soaring demand for aircraft as travel rebounds from the Covid-19 pandemic. Suppliers contending with the residual impact of the global health crisis are still short of workers and can’t meet Airbus’s demand for components ranging from seats to semiconductors to raw materials. That’s sapped profit and cash flows, because Airbus recognizes revenue only when a plane is delivered.
“We continue to face an adverse operating environment that includes in particular persistent tensions in the supply chain,” Chief Executive Officer Guillaume Faury said in the statement. “We remain focused on delivering the commercial aircraft ramp-up and longer-term transformation.”
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Foreign-exchange movements also squeezed profit. Airbus receives revenue in dollars, which have been falling in value against the euro, the currency that makes up the bulk of its expenses. Airbus said it had taken a charge of €360 million related to a dollar pre-delivery payment mismatch and balance sheet revaluation.
The company had negative free cash flow of about €889 million, compared with positive free cash flow of €213 million a year earlier, which it attributed to inventory build-up as it prepares to ramp up production.
