UPGRADE 1-Airbus Group struck by 1.4 bln euros in charges in Q2

An Airplane logo is imagined on the company booth during the European Business Aeronautics Convention & & Exhibition (EBACE) at Cointrin airport in Geneva, Switzerland, Might 24, 2016.

Reuters/Denis Balibouse

Jet Group (AIR.PA) took control of 1.4 billion euros ($ 1.54 billion) in fresh charges for its struggling A400M military airlifter and its postponed A350 jetliner, however reaffirmed its targets as it posted lower quarterly incomes on Wednesday. Hold-ups in deliveries of another keenly waited for jet, the revamped A320neo jetliner, which competes with Boeing’s (BA.N) upcoming 737 MAX, also weighed on Europe’s biggest aerospace group, whose core profits fell 4 percent in the 2nd quarter. Airplane Group posted 1.026 billion euros of charges for the A400M following gearbox issues and fuselage fractures and 385 million for the A350, whose shipments have been held up by shortages of cabin devices, triggering new penalty payments. Core operating earnings prior to one-off items fell 4 percent to 1.183 billion euros in the second quarter as incomes slipped 1 percent to 16.572 billion euros. Analysts had actually on average predicted core revenues of 1.012 billion euros on earnings of 16.299 billion euros, according to a Reuters poll.

The charges for the A400M, coming on top of about 5 billion euros already written off in Europe’s largest defense project, were approximately in line with analysts’ expectations and came alongside various other balance sheet modifications. Jet Group stated ongoing negotiations over a modified delivery schedule for the A400M with seven European NATO buyer nations could have a “significant” more financial effect.

The Franco-German-led business confirmed a sharp cut in production of the civil A380 superjumbo to 12 a month in 2018 following weak sales for the world’s biggest four-engined jets. It said it could not yet approximate the effect of a recent mishap including its H225 Super Puma helicopter in Norway.

( Reporting by Tim Hepher; Editing by Victoria Bryan).

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