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Airbus Announces Below Expectations Results for First Quarter 2023
Gross commercial aircraft orders for Airbus Industries amounted to 156, almost 100 orders lower than in Q1 2022 (253 aircraft), with net orders after cancellations of 142 aircraft. Airbus’ commercial aircraft revenues decreased by 5 percent compared to the same period last year, mainly due to lower deliveries, partly offset by the strengthening of the US dollar.
Airbus Helicopters recorded 39 net orders, 17 fewer than in the previous quarter (56 orders). Nevertheless, helicopter deliveries increased to 71 units compared to 39 in Q1 2022, mainly driven by light helicopters deliveries.
Finally, Airbus Defence and Space’s total order value in Q1 was € 2.5 billion, € 0.7 billion lower than in Q1 2022 (€ 3.2 billion), representing a 6 percent decrease in revenues.
However, Airbus CEO Guillaume Faury was upbeat about the first-quarter results, which confirmed strong demand, particularly for commercial aircraft. The French aircraft manufacturer continues to face an unfavorable operating environment due to ongoing tensions in the supply chain, which will lead to a slowdown in commercial aircraft deliveries. Airbus still aims to deliver 720 commercial aircraft this year.
As a result, the manufacturer’s total revenues declined slightly to 11.8 billion euros in March 2023, compared to 12 billion euros in Q1 2022. Consolidated EBIT Adjusted (an indicator that captures the business margin excluding gains caused by movements in provisions related to programs, restructuring or foreign exchange impacts) fell to 773 million euros from 1,263 million euros in Q1 2022.
Consolidated free cash flow before M&A and customer financing was € -889 million, mainly reflecting the inventory build-up required by the aircraft manufacturer’s production ramp-up.
Commercial and Military Aircraft Production Status
Despite these disappointing results, the ramp-up of the Airbus A220 program continues with the goal of reaching a monthly production rate of 14 aircraft by 2025. The Airbus A320 Family program is also undergoing improvements to increase its production rate to 65 aircraft per month by the end of 2024. The decision to add a second final assembly line in Tianjin will increase the total industrial capacity to 10 final assembly lines for the Airbus A320 Family, helping Airbus to reach a production rate of 75 aircraft per month in 2026. Airbus also aims to increase the Airbus A330 production rate to four per month in 2024 and to nine per month for the Airbus A350 by the end of 2025.
In terms of new versions, the first components for the Airbus A350F have recently been produced at Airbus Atlantic in Nantes and are expected to enter service in 2026, while flight testing of the A321XLR is continuing and entry into service is planned for the second quarter of 2024.
Finally, with regard to the A400M program, development activities continue but risks remain related to the qualification of technical capabilities and associated costs, aircraft operational reliability and cost reduction.
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