Airbus swung to a record net income in 2021 on improved commercial jet deliveries and a sharp rise in its defence and helicopter businesses.
The world's biggest civil plane maker posted a profit of €4.2 billion ($4.66bn), compared with a loss of €1.1bn the year before.
The Toulouse, France-based company said on Thursday it plans to resume dividend payments for the first time in two years — after its hit from the Covid-19 pandemic — following the record results. It has proposed a dividend of €1.50 per share, with a payment date of April 21, 2022.
“The strong financials reflect the higher number of commercial aircraft deliveries, the good performance of our Helicopters and Defence and Space businesses as well as our efforts on cost containment and competitiveness,” Guillaume Faury, Airbus's chief executive, said. “Record net income and our efforts to strengthen the net cash position underpin our proposal to reintroduce dividend payments going forward.”
Consolidated revenue increased 4 per cent to €52.1bn, from €49.9bn in 2020, mainly reflecting the higher number of commercial aircraft deliveries which was partially offset by less favourable foreign exchange rates, the company said.
Airbus delivered a total of 611 commercial aircraft in 2021, versus 566 in 2020. These comprised 50 A220s, 483 A320 family planes, 18 A330s, 55 A350s and five of the superjumbo A380s. Revenue generated by Airbus’ commercial aircraft sales increased 6 per cent, mainly due to higher deliveries from the previous year.
Airbus Helicopters delivered 338 units, compared with 300 in the previous year, including the first H160, with revenue rising 4 per cent, reflecting growth in services and the higher deliveries, the company said.
Revenue at Airbus Defence and Space decreased by 2 per cent. The company delivered eight A400M aircraft in 2021.
In terms of commercial aircraft production, Airbus reaffirmed plans to ramp-up its narrow-bodies production to 65 planes a month by the summer of 2023, from around 45 now.
“For A320 family production rates beyond 2023, the company is still in the assessment phase and working with suppliers to potentially enable an increase above rate 65,” it said.
Airbus's net cash increased more than 75 per cent to €7.6bn, below the pre-crisis level of €12.5bn.
Fourth-quarter earnings before interest and taxes fell 18 per cent year-on-year to €1.57bn. Revenue decreased 14 per cent to €17bn on 187 deliveries.
Looking ahead to 2022, Airbus said it “assumes no further disruptions to the world economy, air traffic, the company’s internal operations and its ability to deliver products and services".
Airbus is targeting delivery of 720 commercial aircraft this year, up from 611 in 2021, and adjusted operating profit of €5.5bn, it said.
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UAE currency: the story behind the money in your pockets
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
