France’s Safran sees start of recovery, maintains outlook
2:54 pm Wednesday, July 28th, 2021
PARIS (Reuters) -French aerospace supplier Safran said on Wednesday it had seen the start of a recovery in the second quarter following the coronavirus crisis, but kept its outlook unchanged amid uncertainty over air traffic in the second half of the year.
Safran, which co-produces jet engines for the Boeing <BA.N> 737 MAX family and competes with Pratt & Whitney <RTX.N> to power the Airbus <AIR.PA> A320neo, said first-half recurring operating income fell 30.4% to 659 million euros on revenue down 21.6% to 6.876 billion.
Widely watched civil aftermarket revenue fell 25.5% in the first half in dollar terms, compared with the same period a year earlier. But in the second quarter, it rebounded by 15% compared with the previous three months.
“Safran’s results for the first half of 2021 remain affected by the effects of the crisis and an unfavourable basis of comparison in” the first quarter, Chief Executive Olivier Andries said. “They also show a start of the recovery in the second quarter.”
Engine makers, which make most of their money from repairs to older engines starting with the second major maintenance overhaul, have been hit by a series of worldwide travel restrictions that left older aircraft parked on the ground.
Safran maintained forecasts for a 2-4% drop in underlying sales and a 100-basis-point increase in recurring operating margins, which means 300 basis points in the second half.
But it said a delay in the pace of recovery in civil aftermarkets for repairs and services remained a risk.
(Reporting by Tim Hepher; editing by David Evans and Leslie Adler)
