EADS profits up despite A400M hit
A400M problems reduced EADS's earnings before interest and tax (EBIT) by €704 million ($900 million) in 2008, following a switch to early-stage accounting for the programme in the third quarter.
Chief financial officer Hans-Peter Ring acknowledges that the €704 million figure "does not reflect a new complete estimate of the loss at completion". He adds: "Once the situation becomes clear we will resume the milestone accounting and update the provision in its entire scope." Uncertainty surrounds both the availability of the engines and mission-critical systems and customers' response to EADS proposals set out in January.
Despite the A400M charge, EADS increased its EBIT to €2.8 billion, from just €52 million in 2007. It achieved net income of €1.57 billion, reversing its 2007 net loss of €446 million. Revenues rose 11% to €43.3 billion, while the net cash position grew from €7 billion to €9.2 billion, a new high. However, EADS's 2009 outlook warns of a lack of "visibility" in the second half of the year. It estimates that "EBIT before one-offs should be down in 2009 but significantly positive" and warns that "revised industrial plans to complete the A400M programme could lead to a significant charge, weighing on EBIT".
Airbus' revenues rose 9% to €27.5 billion, and the unit recorded an EBIT of €1.79 billion, reversing 2007's negative EBIT of €881 million. Its deliveries totalled a record 483 aircraft. Eurocopter also achieved record deliveries, of 588 helicopters, and its EBIT grew 39% to €293 million. Space unit Astrium grew its EBIT by 34% to €234 million, while the Defence & Security unit's EBIT was up 18% at €408 million.
