LONDON, April 18 Car and plane parts maker GKN
posted a 4 percent drop in first-quarter profit as its
auto parts unit was hit by a restructuring charge and falling
vehicle production in Europe, Japan and India.
The British firm on Thursday said pretax profit fell to 119
million pounds ($181.3 million) in the three months to the end
of March, in part due to a 23 million pounds restructuring
charge related to job cuts in Europe and Japan. Its trading
margin fell 0.7 percentage points to 7.4 percent.
Profits at Driveline, which makes products such as
driveshafts, chassis and axles, fell 20 percent after being hit
by weak demand, especially in continental Europe. GKN makes
about 55 percent of its profits from Driveline.
Margins at the division, whose customers include Europe's
Volkswagen and U.S. carmakers General Motors
and Ford, fell to 6 percent from 7.6 percent a year
Demand for new cars has slumped in Europe as governments
drive through austerity measures to reduce debts. The U.S.
market, in contrast, has bounced back strongly, while Asia has
European car sales have fallen around 10 percent in the
first three months of 2013, leading some carmakers to cut their
GKN said global light vehicle production in the first
quarter fell 1 percent year-on-year, with good growth in China
and Brazil offset by declines in Japan, Europe and India.
GKN's aerospace unit, which makes airframes for Airbus
and Boeing, delivered a 50 percent rise in first
quarter profit, helped by the ramp-up of several civil aerospace
programmes, which have offset falling military sales, and last
year's purchase of Volvo's aerospace unit.
Global airlines will buy $3.5 trillion of aircraft over the
next 20 years to meet demand for travel to and from emerging
markets and renew ageing fleets in the West, according to the
world's big two planemakers, helping suppliers such as GKN.