Airbus Loss Of €1.4bn Primarily Because Of A Record Bribery Fine

Despite an annual loss of €1.4bn for 2019 partly because of the record fines for bribery, the , European aircraft maker Airbus raised its dividend for shareholders as it also reported deliveries of aircraft to be at an all time high.

In contrast in the previous year, Airbus has reported a net profit of €3.1bn.

The company had earlier admitted to have paid huge bribes on an “endemic” basis to secure contracts in 20 countries and therefore has had to face bribery charges by regulators in the United States, France and the United Kingdom.  Last Month the company said that it had set aside an amount of €3.6bn to cover for the settlement fines with the regulators of the three countries. The fines in the three countries combined amounted to the biggest ever fine charged from a company over bribery charges.

Additionally, problems with its A400M military transport programme caused the company a loss of €1.2bn while he extension till March of a ban by the German government related to export licences to Saudi Arabia also resulted in a hit of another €221m.

On the other hand however, the revenue of the company increased by 11 per cent to reach €70.5bn in 2019. The company announced a dividend of €1.80 a share which was 9 per cent year on year. In 2019, the company managed to deliver 863 commercial planes which was record for the company compared to 800 it delivered in 2018. That included 112 A350s and 642 A320s. Airbus now expects that it would be deliver more aircraft in 2020 at about 880 units in number.

Airbus also apparently benefited from the global grounding of the 737 Max planes of its rival Boeing following tow deadly crashes involving the planes in which 346 people were killed. This potentially helped boost orders to 768 last year.

There was a 19 per cent growth in the adjusted operating profits, excluding the settlement and other one-offs last year at €6.9bn while the company said that it expected it to reach €7.5bn in 2020. However the forecast of the company for the current year is based on the assumption that there would be no major disruptions to the global economy and air traffic including none more form the coronavirus.

“We achieved a great deal in 2019,” said the Airbus chief executive, Guillaume Faury. “The level of confidence in our ability to continue to deliver sustainable growth going forward has led to a dividend proposal of €1.80 per share. Our focus in 2020 will be on reinforcing our company culture, improving operationally, and adjusting our cost structure to strengthen the financial performance and prepare for the future.”

(Adapted from TheGuardian.com)



Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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