Airbus profits more than halve on extra charges in space business

Airbus reported a sharp drop in second-quarter profits as previously announced charges in its space business and persistent supply chain challenges weighed on the performance of the European aerospace and defence group. The world’s largest plane maker said adjusted operating profit fell more than half to E814m in the quarter, while revenues rose marginally to E15.9b.  Airbus said it had recorded a charge of E989m against its space business, higher than the E900m estimate it had announced last month alongside a profit warning. The company spooked investors in June when it cut its annual profit forecast and lowered its full-year commercial aircraft delivery target, citing a degraded operating environment and problems in its space business. The warning triggered a sharp sell-off in Airbus shares, wiping more than $10bn off its market value the day after the announcement. Its shares are now trading more than 5% down year to date, closing at E133.58 a on Tuesday. Guillaume Faury, Airbus CE, on Tuesday said the company’s financial performance in the first six months of the year “mainly reflects significant charges in our space business”, adding the company was “addressing the root causes of these issues”. The company has initiated a review of long-term programmes in its space systems unit, and has reassessed timelines and risks for each. It is also evaluating all strategic options including “restructuring, portfolio review, co-operation and M&A” for the division. Airbus has held exploratory talks with Thales about merging some of their space activities. In its key commercial aircraft division, Airbus has launched a cost-savings programme called Project Lead to ensure the company is as “cost efficient” as it can be as it seeks to deliver its ambitious plans to meet resurgent demand from airline customers.<br/>