AIRBUS has posted a strong start to the first quarter of 2024, surpassing last year's commercial aircraft deliveries, noting the increase in production of the A350 widebody aircraft driven by high demand, contributes to the firm's positive outlook.

The firm’s statement issued yesterday and shared to this journalist, stated that with a solid backlog and adherence to 2024 forecasts, Airbus and the aerospace industry are poised for continued success.

“We delivered first quarter 2024 results against the backdrop of an operating environment that shows no sign of improvement. Geopolitical and supply chain tensions continue. In that context, we delivered 142 commercial aircraft,” said Airbus CEO Guillaume Faury.

Adding: “We started 2024 with a solid order intake across our businesses. The strong momentum on widebody aircraft underpins our decision to increase the production rate for the A350 to 12 aircraft a month in 2028.”

The CEO further said: “Our ramp up plans are continuing, supported by the investments in our production system while relying on our core pillars of safety, quality, integrity, compliance and security.”

The statement reveals that in the first quarter of 2024, Airbus experienced a rise in total gross commercial aircraft orders to 170, up from 156 in Q1 2023. Despite no cancellations, net orders remained at 142, matching the previous year's figure. As of March 2024, the order backlog stood at 8,626 commercial aircraft.

During the same period, Airbus Helicopters also observed a growth in net orders, reaching 63 units compared to 39 in Q1 2023, particularly in the light and medium segments. Meanwhile, Airbus Defence and Space's order intake by value was slightly lower at €2.0 billion, down from the previous year's €2.5 billion.

In terms of financial performance, Airbus reported a 9 percent increase in consolidated revenues in the first quarter of 2023, totaling €12.8 billion compared to €11.8 billion in the same period last year.

This growth was primarily attributed to the delivery of 142 commercial aircraft, consisting of 12 A220s, 116 A320 Family, 7 A330s, and 7 A350s. Revenues from commercial aircraft activities increased by 13 percent, largely due to the higher number of deliveries.

Despite a decline in Airbus Helicopters' deliveries to 50 units during the quarter, resulting in a 9 percent decrease in revenues, this was partly offset by a rise in services revenue.

Airbus Defence and Space experienced a 4 percent increase in revenues in the first quarter of 2023, primarily due to strong performance in the Air Power business. This growth was slightly tempered by less favorable phasing in Space Systems. During the quarter, one A400M military airlifter was successfully delivered, showcasing the company's continued operational success.

The overall strong performance of Airbus in the first quarter of 2023 demonstrates the company's ongoing success in the commercial aircraft market and its diverse business portfolio across various segments.

Consolidated EBIT Adjusted is a critical metric that provides a transparent view of the underlying business performance by excluding one-time charges or profits related to provisions, restructuring, foreign exchange impacts, and capital gains/losses from business disposals or acquisitions. In the first quarter of 2023, Consolidated EBIT Adjusted amounted to €577 million, a slight decrease from the previous year's figure of €773 million.

This metric also accounts for the impact of the increased Airbus Employee Share Ownership Plan, which saw record employee participation and led to an expense increase of slightly over €0.1 billion compared to the prior year. This inclusion demonstrates Airbus' dedication to fostering employee engagement and ownership.

In Q1 2023, EBIT Adjusted for Airbus' commercial aircraft activities declined to €507 million from €580 million. The decrease was primarily due to a slightly less favorable hedge rate, which offset the positive impact of higher deliveries. Additionally, investments made in preparation for future growth also contributed to the decline in EBIT Adjusted.

The A220 program is steadily ramping up towards achieving a production rate of 14 aircraft per month by 2026, with a strong focus on improving industrial maturity and financial performance. Similarly, significant progress is being made on the A320 Family program, aiming for a production rate of 75 aircraft per month by 2026.

The highly anticipated A321XLR is on track for entry-into-service in Q3 2024. Additionally, Airbus plans to increase the production rate for the A350 to 12 aircraft per month by 2028 and aims to achieve rate 4 for the A330 by 2024.

In the latest quarter, Airbus Helicopters' EBIT Adjusted decreased to €71 million from €156 million in the previous quarter, primarily due to lower deliveries following a strong first quarter in 2023. EBIT Adjusted at Airbus Defence and Space also declined in the first quarter of 2023 to € -9 million from €36 million in the previous quarter, mainly attributed to reduced volume and profitability in the Space Systems division.

Progress on the A400M program remains steady with development activities advancing in line with the revised capability roadmap. Retrofit activities are on track and being closely coordinated with customers to ensure seamless integration.

While the first quarter of 2024 saw no significant material impact, risks persist in areas such as the qualification of technical capabilities, operational reliability of the aircraft, cost reduction efforts, and securing overall volume. Continued vigilance and proactive management are necessary to mitigate these risks and ensure successful program delivery.

The statement also notes an increase in consolidated self-financed R&D expenses to €743 million in the current period compared to €683 million in the first quarter of 2023. Additionally, consolidated EBIT (reported) increased to €609 million from €390 million in Q1 2023, with net adjustments contributing an additional €32 million to the total.

The financial results for the quarter ending in March 2024 showed a significant increase, with €229 million in net income (compared to €149 million in Q1 2023), driven mainly by positive revaluations of certain equity investments. Consolidated net income reached €595 million (compared to €466 million in Q1 2023), resulting in reported earnings per share of €0.76 (compared to €0.59 in Q1 2023).

Consolidated free cash flow before customer financing was € -1,791 million (compared to € -876 million in Q1 2023), primarily due to planned inventory build-up for program ramp-ups.

Overall consolidated free cash flow was € -1,799 million (compared to € -873 million in Q1 2023). The gross cash position at the end of March 2024 was €23.4 billion (compared to €25.3 billion at year-end 2023), with a consolidated net cash position of €8.7 billion (compared to €10.7 billion at year-end 2023).

Looking ahead, the guidance provided in February 2024 remains unchanged. The Company's 2024 outlook assumes no further disruptions to the global economy, air traffic, supply chain, internal operations, or product and service delivery.