Plane supplier FACC cuts margin view, seeks efficiencies (updated)
16/01/2020 09:36
* 2019 EBIT margin now seen at 5.2%-5.7%
* 2019 revenues now seen at 668 mln euros
* Efficiency program to help reach medium-term targets
(Adds detail, background)
VIENNA, Jan 16 (Reuters) - Plane parts maker FACC FACC.VI
on Thursday cut its profit margin forecast for its shortened
2019 fiscal year amid tough trading conditions in the aviation
industry, and announced an efficiency programme to help reach
its medium-term targets.
The Austrian headquartered group, owned by China's AVIC
000768.SZ , now expects the margin on earnings before interest
and tax in its 2019 fiscal year, which runs March-December, to
come in between 5.2% and 5.7% after previously forecasting 6%.
FACC, which makes components for wings, tail assemblies and
fuselages as well as engines and cabin interiors for all major
planemakers, also increased its 2019 sales forecast to 668
million euros ($745 million) from 600 million euros.
The company's profitability has recently been hit by higher
than expected start-up costs for new assembly lines.
From 2020, the group will report per calendar year.
At 0930 GMT, FACC shares were down 0.6% at 12.64 euros.
To boost profitability, FACC will spend up to 50 million
euros to streamline its supply chain and business processes and
bring the production of strategic components in house, it said.
The supplier is feeling the effects of slowing plane orders
due to lingering fears of an economic downturn and U.S.-China
trade tensions.
"The medium-term growth and earnings targets remain
unchanged, albeit depending on the market development -
significant rate increases on growth projects have been
completed," FACC said.
Around half of FACC's revenues come from Airbus AIR.PA ,
which reported higher airplane orders for 2019 but failed to
keep pace with deliveries after axing its A380 superjumbo
programme.
Boeing's BA.N orders slumped to the lowest in decades last
year after the grounding of the its 737 MAX jet after two fatal
crashes. FACC supplies several Boeing planes including the 787,
but not the 737 MAX.
FACC might benefit from an initial trade pact between the
United States and China as Boeing is expected to get a major
order for wide-body jets from China, including its 787 or 777-9
models, or a mixture of both, according to industry sources.
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(Reporting by Kirsti Knolle, editing by Emma Thomasson and Mark
Potter)
((kirsti.knolle@thomsonreuters.com; +43 1 53 11 22 55;))