February 27, 2019 / 6:24 AM / 2 months ago

French group Safran predicts growth after stronger 2018

PARIS (Reuters) - France’s Safran predicted higher revenues and profits this year as it posted stronger 2018 figures featuring a sales boost from the acquisition of cabin maker Zodiac Aerospace.

The logo of Safran is seen outside the company's heanquarters in Paris, France, February 24, 2017. REUTERS/Charles Platiau

Recurring operating profit jumped 38 percent to 3.023 billion euros ($3.44 billion) on revenues that were up by 32 percent to 21.05 billion euros.

Underlying revenues, stripping out factors including Zodiac’s presence on the books since March, grew 10.4 percent.

Analysts were on average expecting operating profit of 2.9 billion euros on revenue of 21.04 billion, according to Refinitiv Eikon data.

Safran, which co-produces the world’s most-sold family of jetliner engines with General Electric, said their CFM joint-venture delivered 1,118 new LEAP engines last year.

CFM International, whose engines power all recent Boeing narrow-body planes and about half the competing Airbus models in competition with Pratt & Whitney, is on track to deliver more than 1,800 LEAP engines in 2019, added Safran.

It also said the integration of Zodiac, which had suffered a three-year production crisis before losing its independence to Safran last year, was “on track”.

Progress on the switchover to the new LEAP engine and the integration of Zodiac have been under scrutiny following some delays in LEAP engine deliveries in the past two years and questions over market confidence in delayed Zodiac seats.

Safran said Zodiac had improved its performance in France and the United States and that fixing other challenges was a top priority. Safran said it was on track to hit 2022 synergy goals.

The civil aftermarket, also widely watched by analysts, grew 12.2 percent in dollar terms last year due to rising spare parts sales for existing jet engines, and it grew by 5.5 percent in the fourth quarter alone.

For 2019, Safran predicted a 7-9 percent increase in revenue, or 5 percent in underlying terms. It forecast low-teens percentage growth in recurring operating profit.

Reporting by Tim Hepher; Editing by Sudip Kar-Gupta

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