* 2012 revenue rises 15.5 pct to 13.56 bln eur
* Revenue forecast to rise around 5 pct in 2013
* CEO says interested in Avio space propulsion unit
* Shares fall 2.5 pct, revenue forecast disappoints
By James Regan and Cyril Altmeyer
PARIS, Feb 21 Strong demand for aircraft
engines, parts and lucrative aftermarket maintenance contracts
pushed full-year operating profit at French aerospace group
Safran up 24 percent.
Safran, part of the CFM engine joint venture with General
Electric, is benefiting from record aircraft production as
Airbus and Boeing tap into transport growth in emerging markets
and demand from Western airlines for fuel savings.
The widely watched civil aftermarket, where engine-makers
make most of their margins, is picking up as many CFM engines
enter the workshop for their first major overhaul.
Safran posted full-year recurring operating income of 1.47
billion euros ($1.97 billion), in line with the average forecast
in a Thomson Reuters I/B/E/S analyst poll, on revenue of 13.56
billion, up 15.5 percent year-on-year.
Safran also said on Thursday it was interested in buying
Avio's space propulsion business - maker of boosters for the
Ariane 5 rocket - after losing out to General Electric in
a race to buy the Italian aerospace supplier late last year.
Safran forecast 2013 revenue growth would slow to around 5
percent, with recurring operating income up by a mid-teen
"Safran reported a solid finish to 2012, bolstered by strong
civil aftermarket performance," Barclays analysts wrote, adding
that the group's overall outlook could disappoint investors, but
forecasts for the civil aftermarket were higher than expected.
Barclays said the market was expecting around 9 percent
sales growth for 2013. Safran shares were down 2.5 percent by
0846 GMT in a 1.5 percent weaker French market. The
stock had risen about 10 percent in the past three months.
Civil aftermarket sales grew 9.4 percent in dollar terms
last year, driven by first overhauls of recent CFM56 engines.
Aerospace propulsion revenue including Safran's share of
CFM, which powers Boeing 737s and some Airbus
jets, rose 14.6 percent last year, with operating income up 21
percent to 1.1 billion euros.
The improvement followed "healthy activity in civil
aftermarket and helicopter engines maintenance", as well as
higher volume on all military and commercial engines.
Safran Chief Executive Jean-Paul Herteman said Boeing had
asked Safran to continue delivering cabling, landing gear and
other parts for its 787 Dreamliner at the same rate, despite
problems related to the aircraft's use of lithium-ion batteries.
"We are particularly confident we are on track for further
solid earnings growth in 2013 and in future years," he said.
Safran said its order backlog rose 5.5 billion euros to 48.5
billion last year and free cash flow, at 38 percent of recurring
operating income, would reach about 40 percent this year.
Safran sought last year to buy Turin, northern Italy-based
Avio, but lost out when General Electric agreed to buy its
aviation unit for $4.3 billion from private equity fund Cinven
and state-controlled defence group Finmeccanica.
Avio makes components for the GE engine for the Boeing 787
and ranks among Italy's industrial jewels as one of the most
technologically advanced companies in its field.
General Electric did not buy Avio's space unit, which the
Italian government considers strategic and was expected to make
sales of between 280 million euros and 285 million in 2012.
Herteman said Safran was still interested in the space
"The Avio space business could be on the market in the
short-term," he said. "We are a partner with Avio in space.
There are some strong synergies and complementarities. It is too
early to say more on that."
The two are "not yet" in exploratory discussions, he added.