PARIS, Oct 31 — European aircraft maker Airbus warned today that various investigations into alleged fraud, bribery and corruption could impact its earnings.
Airbus also said it was still battling delivery problems of the new fuel-efficient engines made by Pratt and Whitney for its A320neo jet, even if tailwinds from exchange rate effects boosted its bottom line in the third quarter.
“The investigations initiated by the UK’s Serious Fraud Office (SFO) and France’s Parquet National Financier (PNF)... could have a material impact on the financial statements, business and operations of Airbus,” the group said in a statement.
“Any penalties potentially levied as a result could have negative consequences for Airbus.
“However, at this stage it is too early to determine the likelihood or extent of any such possible consequence,” the statement said.
British and French authorities launched their probe after Airbus itself detected and alerted them to alleged irregularities concerning third-party consultants.
The plane maker is also under investigation in Austria and Germany for possible corruption related to the sale of Eurofighter jets to Austria.
And Airbus is also the subject of a probe in the US regarding possible inaccuracies in filings made with the US Department of State.
In that case, too, Airbus said it was “unable to reasonably estimate the time it may take to resolve the matter or the amount or range of potential loss, penalty or other government action, if any, that may be incurred in connection with this matter.”
‘Healthy market environment’
Turning to its business performance in the third quarter, Airbus said that net profit amounted to €348 million (approx RM1.7 billion) in the three months to September, up from just €50 million in the same period a year earlier.
Third-quarter revenues advanced by two per cent to €14.244 billion.
Taking the nine months to September, net profit edged up by just two per cent to €1.851 billion on a one-per cent increase in revenues to €42.953 billion.
“The strong backlog and a healthy market environment continue to support our commercial aircraft production ramp-up plans,” said chief executive Tom Enders.
“We confirm our outlook even though this year’s delivery schedule is extremely back-loaded, largely due to the well-known engine problems plaguing our A320neo family.”
In all, 90 A320neo aircraft were delivered to 19 customers in the nine-month period, Airbus said.
At the beginning of 2017, around 200 A320neo deliveries had been targeted for the full year.
But “due to engine availability issues... A320neo deliveries are now expected to be slightly below that target,” Airbus said.
Delivery challenges
“The A320neo ramp-up remains challenging with the delivery profile very much loaded into the fourth quarter. Priority is being given to engine deliveries to customers to be used for spares, as agreed with the engine manufacturers,” the statement said.
The group’s finance chief Harald Wilhelm told a telephone news conference that “significant progress has been made on solutions to technical problems.”
The modified engines would be fitted to aircraft in the first quarter of 2018, following testing, Wilhelm said.
The A320neo is also offered with another engine, the Leap-1A of CFM International, a joint venture between France’s Safran group and General Electric in the US.
The total number of aircraft to be delivered should be “slightly below 720,” CFO Wilhelm said.
Airbus said its A400M military transport aircraft, which has been hit by cost overruns and delays, as well as technical problems, was also facing a number of challenges.
“Achievement of the contractual technical capabilities and associated costs remain highly challenging,” it said.
“There are also challenges remaining on securing sufficient export orders in time, on cost reductions, industrial efficiency and commercial exposure, which could all impact the programme significantly.”
Twelve A400M aircraft had been delivered in the past nine months of 2017 compared to 11 in the year-earlier period. — AFP
