Airbus Defence and Space’s EBIT Adjusted results for the First Quarter (Q1) for this year stands at €15 million, or nearly seven times lower than in Q1 2019 when it was €101 million, owing to the COVID-19 pandemic.
“We saw a solid start to the year both commercially and industrially but we are quickly seeing the impact of the COVID-19 pandemic coming through in the numbers. We are now in the midst of the gravest crisis the aerospace industry has ever known,” said Airbus Chief Executive Officer Guillaume Faury.
In its Q1 financial report published today, the EBIT (Earnings Before Interest and Tax) Adjusted value of Airbus Defence and Space to nosedived to -85% (€15 million), representing a steep fall from €101 million recorded for the same period last year.
“It reflects lower business performance, including in Space Systems. Due to the severity of the coronavirus pandemic, the incremental impact on the business is being assessed and the restructuring plan at Defence and Space will be adjusted accordingly,” the company said.
The value for Airbus Helicopters is however encouraging. It increased to €53 million from €15 million in Q1 2019.
Consolidated EBIT Adjusted - an alternative performance measure and key indicator capturing the underlying business margin by excluding material charges or profits caused by movements in provisions related to programmes, restructurings or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses - halved to € 281 million (Q1 2019: € 549 million). It made a net loss of €481 million compared with a previous profit of €40 million.
The company reported €7.5 billion in commercial aircraft revenues. Its earnings in the sector dropped by 82% to €57 million. The EBIT Adjusted was €191 million, down 59%.
Airbus says it took a €33 million charge relating to the A380 programme, which is being terminated.
Across the company overall free cash flow amounted to negative €8 billion, close to double the negative €4.3 billion from last year. This however includes payment of €3.6 billion in penalties over the high-profile bribery case.
Faury said the company is concentrating on cash containment and is adapting commercial aircraft production rates.
Earlier this month, Airbus revised its production rates downwards by a third to adapt to the new Coronavirus market environment. The new average production rates going forward have been set as follows: A320 to rate 40 per month, A330 to rate 2 per month and A350 to rate 6 per month.
Airbus expects measures taken so far to reduce capital expenditure this year by around €700 million to € 1.9 billion.