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Jack Richardson

Airbus has reported consolidated financial results for the Half-Year (H1) ended 30th June 2020. Consolidated revenues decreased to €18.9bn (H1 2019: €30.9bn), driven by the difficult market environment impacting the commercial aircraft business with around 50% fewer deliveries year-on-year. This was partly offset by more favourable foreign exchange rates with a total of 196 commercial aircraft delivered (H1 2019: 389 aircraft), comprising 11 A220s, 157 A320 Family, 5 A330s and 23 A350s. Airbus Helicopters reported stable revenues, reflecting lower deliveries of 104 units (H1 2019: 143 units) partially compensated by higher services. Revenues at Airbus Defence and Space were impacted by lower volume and mix, in particular at Space Systems, as well as delays in some programmes caused by the COVID-19 situation. This division’s order intake increased to € 5.6bn.

Difficult environment

“The impact of the COVID-19 pandemic on our financials is now very visible in the second quarter, with H1 commercial aircraft deliveries halving compared to a year ago,” said Airbus Chief Executive Officer Guillaume Faury. “We have calibrated the business to face the new market environment on an industrial basis and the supply chain is now working in line with the new plan. It is our ambition to not consume cash before M&A and customer financing in H2 2020. We face a difficult situation with uncertainty ahead, but with the decisions we have taken, we believe we are adequately positioned to navigate these challenging times in our industry.”

EBIT Adjusted at Airbus Defence and Space decreased to € 186 million (H1 2019: € 233 million), reflecting the COVID-19 impact, mainly in Space Systems, partly offset by cost reduction measures. The Division’s restructuring plan was updated to also reflect the impact of the coronavirus pandemic. Three A400M transport aircraft were delivered in H1 2020 with the certification of automatic low-level flight capability and simultaneous paratrooper dispatch achieved in H1 2020, marking major milestones towards the aircraft’s full development. A400M retrofit activities are progressing in close alignment with customers.

The consolidated reported loss per share of € -2.45 (H1 2019 earnings per share: € 1.54) includes the financial result of € -429 million (H1 2019: € -215m). The financial result reflects a net € -212m related to Dassault Aviation as well as the impairment of a loan to OneWeb, recorded in Q1 2020 for an amount of € -136m. The consolidated net loss was € -1,919m (H1 2019 net income: € 1,197m).

Key post-closing events

In the frame of COVID-19, discussions are progressing with social partners. A restructuring provision is expected to be recognised once the necessary conditions are fulfilled. The amount is expected to be between € 1.2 bn and  € 1.6 bn.

The UK Serious Fraud Office (SFO) has requisitioned GPT Special Project Management Ltd (GPT) to appear in court for prosecution on a single corruption-related charge. GPT is a UK company that operated in Saudi Arabia which was acquired by Airbus in 2007 and ceased operations in April 2020. The SFO’s investigation related to contractual arrangements originating prior to GPT’s acquisition and continuing thereafter. A resolution of GPT, whatever its form, will not affect the 31 January 2020 UK Deferred Prosecution Agreement and a value has been provisioned in the Airbus accounts.

On 24 July 2020, the Company announced it had agreed with the governments of France and Spain to make amendments to the A350 Repayable Launch Investment (RLI) contracts to end the long-standing World Trade Organisation (WTO) dispute and remove any justification for US tariffs. After 16 years of litigation at the WTO, this final step removes the last contentious point by amending the French and Spanish contracts to what the WTO considers the appropriate interest rate and risk assessment benchmarks.