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Airbus, Space Activities Lift EADS 2004 Profit By 60 Percent

Munich, Germany (AFP) Mar 09, 2005
The European aerospace giant EADS raised net profit by 60 percent last year with a strong performance from Airbus and a switch into profit by its space activities.

The European Aeronautic Defence and Space Company reported that net profit had surged by 60 percrent from the 2003 figure to 1.03 billion euros (1.36 billion dollars).

The result was higher than the company had expected and the group, which owns 80 percent of the European aircraft manufacturer Airbus and has wide military interests in the aeronautics sector, said it was raising its target for operating profit this year.

Total group sales were in line with forecasts at 31.76 billion euros.

EADS raised its target for EBIT this year to 2.6 billion euros from a previous target of 2.4 billion euros.

EADS said that the growth it was achieving reflected improved performance by all divisions, partly offset by less favourable foreign exchange coverage and weakness of the dollar.

The group expected sales this year to rise by 3.9 percent to 33 billion euros driven by an increase of 10.0 percent in defence activity sales.

The group also said it intended to deliver 350-360 Airbus airliners this year.

The board recommended an increase of 25.0 percent in the dividend for 2004 to 0.50 euros per share.

Operating profit on a basis of earnings before interest and tax, before the writing down of acquired assets and before exceptional items, rose by 58.0 percent to 2.444 billion euros compared with a target set by the company of more than 2.3 billion euros.

The operating margin was 7.7 percent, in line with a forecast that it would exceed 7.0 percent, from 5.1 percent in 2003.

The group said that the strong rise of EBIT earnings reflected a sharp increase in profitability by Airbus and the space division.

The Airbus EBIT figure rose to 1.922 billion euros equivalent to 5.9 percent of sales owing mainly to an increase in the number of aircraft delivered to 320 from 305 in 2003, an increase in the proportion of big aircraft supplied and to efforts to hold down costs.

The space division switched into profit with an EBIT of 10 million euros from a loss of 400 million euros in 2003, enabling the business to look forward to solid growth, EADS said.

The division making military transport aircraft reported an EBIT of 26 million euros, a fall of 13.0 percent from 30 million euros in 2003 owing to a surge of charges for early retirements to 28 million euros from 17 million euros and the costs of a a drive to sell refuelling aircraft.

The aeronautic division reported a fall of 5.0 percent in its EBIT figure to 206 million euros from 217 million euros owing to continuing problems in its business offering maintenance services for commercial aircraft.

The EBIT figure at the defence and security systems division rose by 33.0 percent to 228 million euros from 171 million euros despite restructuring charges of 88.0 million euros from 50.0 million euros in 2003 and several investments from shareholders' funds, and notably investment in a pilotless drone called Euromale.

Earlier, joint chairman Philippe Camus had told AFP that a tightening of links between EADS and the French defence electronics group Thales was no longer on the cards because the German group DaimlerChrysler, the biggest shareholder in EADS with 30 percent, had said it objected.

Camus said: "For the moment, the matter is closed." This was because the head of DaimlerChrysler Juergen Schrempp was not convinced that the proposition was worthwhile. "There has been a debate, and the debate has ended. That's it," Camus said.

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