PARIS, July 31 (Reuters) - 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 billion euros.
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)