Airbus warns of potential financial hit from fraud probes

European aircraft maker Airbus said Tuesday that investigations into fraud, bribery and corruption by the French and British authorities could impact its earnings.

Airbus also said in a statement it was still battling delivery problems of the new fuel-efficient engines for its A320neo jet, even if tailwinds from exchange rate effects boosted its bottom line in the third quarter.

"The investigations initiated by the UK's Serious Fraud Office (SFO) and France's Parquet National Financier (PNF)... could have a material impact on the financial statements, business and operations of Airbus," the statement said.

"However, at this stage it is too early to determine the likelihood or extent of any such possible consequence."

Airbus is being investigated in France and Britain for alleged irregularities concerning third-party consultants that the company itself detected and alerted to the authorities.
The planemaker is also under investigation in Austria and Germany for possible corruption related to the sale of Eurofighter jets to Austria.

Turning to its business performance in the third quarter, Airbus said that net profit amounted to 348 million euros ($405 million) in the three months to September, up from just 50 million euros in the same period a year earlier.

Third-quarter revenues advanced by two percent to 14.244 billion euros.

Taking the nine months to September, net profit edged up by just two percent to 1.851 billion euros on a one-percent increase in revenues to 42.953 billion euros.

"The strong backlog and a healthy market environment continue to support our commercial aircraft production ramp-up plans," said chief executive Tom Enders.

"We confirm our outlook even though this year's delivery schedule is extremely back-loaded, largely due to the well-known engine problems plaguing our A320neo Family."

In all, 90 A320neo aircraft were delivered to 19 customers in the nine-month period, Airbus said.

At the beginning of 2017, around 200 A320neo deliveries had been targeted for the full year.

But "due to engine availability issues... A320neo deliveries are now expected to be slightly below that target," Airbus said.

"The A320neo ramp-up remains challenging with the delivery profile very much loaded into the fourth quarter. Priority is being given to engine deliveries to customers to be used for spares, as agreed with the engine manufacturers," the statement said.

Source:AFP