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Market Cap £74.21bn
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Revenue £46.19bn
Position in Universe 14th / 851

Leonardo recoups some losses after problems with sub-contractor

Fri 15th October, 2021 10:18am
ROME, Oct 15 (Reuters) - Shares in Leonardo  LDOF.MI  rose
as much as 3% in early trade on Friday a day after falling when
Boeing  BA.N  said parts supplied by the Italian defence group
sourced from a sub-contractor had been improperly manufactured.
    Leonardo fell more than 7% on Thursday.
    The state-controlled conglomerate said the sub-contractor,
Italy's Manufacturing Processes Specification (MPS), was among
sub-suppliers qualified by Boeing.  urn:newsml:reuters.com:*:nR1N2QO00P
    "The sub-supplier is under scrutiny by prosecutors therefore
Leonardo is an injured party and will not bear any potential
costs associated with this issue," Leonardo said on Thursday.
    It said MPS was no longer one of its suppliers.
    MPS has worked for a broad set of aerospace companies
including Spirit AeroSystems  SPR.N , according to industry
sources and documents.  urn:newsml:reuters.com:*:nL1N2RA29M
    It is also an approved supplier to Airbus  AIR.PA ,
according to a list available via the planemaker's website. 
    "The reaction of the shares already prices in the potential
risk of non-recurring expenses, but the reputational problem for
(Leonardo's) Aerostructures division remains," broker Equita
said. 
    The division is already suffering from a fall in demand and
is expected to burn through cash this year as some of plants
operate below capacity.
    Shares in Leonardo were up 1.1% at 0833 GMT, outpacing a
0.6% rise in Italy's blue-chip index FTSE MIB  .FTMIB .       

 (Reporting by Francesca Landini and Giulia Segreti; editing by
Jason Neely)
 ((Giulia.Segreti@tr.com; +39.06.80307714;))
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