PARIS, July 31 French aerospace group Safran
raised its core profit target as it reported higher
first-half earnings on Thursday.
The maker of civil jet engines, optronics and detection
equipment said its adjusted recurring operating profit - a
measure of underlying business -- rose 16.5 percent to 981
million euros at the half-way stage.
First-half adjusted revenue rose 4.4 percent to 7.208
Safran said its widely watched civil aftermarket rose 9.4
percent in the first half or 6.5 percent in the second quarter -
a slowdown from the 12.4 percent seen in the first three months
of the year. But it reaffirmed a target of "low to mid-teens
growth" in percentage terms for the whole of 2014.
Safran upgraded its full-year forecast for growth in its
adjusted recurring operating profit to a percentage "approaching
the mid-teens," rather then low double digits seen previously.
It said its 2014 free cashflow would represent 35 percent of
recurring operating income, instead of close to 40 percent
expected previously, on the basis of higher investments and
uncertainty over the timing of payments by government customers.
Chief Executive Jean-Paul Herteman said in a statement that
Safran plans to spend more to "strengthen our supply chain and
increase our development capacity" as it gears up for higher
engine production and "additional opportunities".
The company said its R&D costs and capital spending would
accordingly rise in 2014, but fall in 2015/16.
(Reporting by Tim Hepher, Editing by James Regan)