Boeing posted a quarterly net loss of more than $3.3 billion in three months to September 30, from $132 million in the same period last year, driven by a drop in the defence, space and security business division.
The company’s loss per share in the third quarter expanded to $5.49 from $0.19 in the same period last year. Total company backlog at quarter-end stood at $381bn.
The US plane maker’s revenue jumped 4.4 per cent annually to almost $16bn, the company said in a statement.
"We continue to make important strides in our turnaround and remain focused on our performance," said Dave Calhoun, Boeing president and chief executive.
"We generated strong cash in the quarter and are on a solid path to achieving positive free cash flow for 2022. At the same time, revenue and earnings were significantly impacted by losses on our fixed-price defence development programmes,” Mr Calhoun said.
The company’s stock dropped almost 1 per cent in pre-market trading to $145.25 a share.
The operating cash flow improved to $3.2bn in the quarter, reflecting higher commercial deliveries, favourable receipt timing and a tax refund, the company said.
The commercial planes division’s third-quarter revenue increased 40 per cent yearly to $6.3bn, driven by the resumption of 787 deliveries and higher 737 deliveries.
The company said it resumed 787 deliveries in late August, following “comprehensive reviews” to ensure each plane meets the highest standards. The programme is producing at a low rate with an expected gradual return to five per month over time.
During the quarter, the company secured net orders for 227 aircraft — including 167 737s, 27 767s, 18 777s and 15 787 planes.
Commercial airplanes delivered 112 airplanes during the quarter and backlog included over 4,300 airplanes valued at $307bn.
Revenue from defence, space and security unit dropped 20 per cent to $5.3bn in the third quarter. It was mainly due to $2.8bn of losses on certain fixed-price development programmes, driven by higher estimated manufacturing and supply chain costs, and technical challenges, Boeing said.
During the July-September period, Boeing’s defence, space and security arm delivered 34 aircraft and two satellites, including the first four MH-139A Grey Wolf helicopters to the US Air Force. Backlog at the unit stood at $55bn, of which 31 per cent represents orders from customers outside the US.
Global services third-quarter revenue increased 5 per cent to $4.4bn.
“We remain in a challenging environment and have more work ahead to drive stability, improve our performance and ensure we are consistently delivering on our commitments. Despite the challenges, I am proud of our team and the progress we have made to strengthen our company,” Mr Calhoun said.
The company’s cash and investments in marketable securities increased to $14.3bn, compared to $11.4bn at the beginning of September quarter. The company said it has access to credit facilities of $12bn, which remain undrawn.
What vitamins do we know are beneficial for living in the UAE
Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.
Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.
Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.
Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.
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Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
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Director: Jared Hess
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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.”
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UAE currency: the story behind the money in your pockets
