Zodiac Aerospace's troubled seating business is showing signs of
recovery despite sales over the first half deteriorating by more than a
quarter.
The company says sales for its seats branch – part
of its aircraft interiors division – were down by 26% to €449 million ($548
million). This included an organic decline of 21.8%.
Zodiac says it had been expecting the slump, because
the figures were affected by commercial impact from "previous design and
execution issues".
The company had been forced to take action after
serious production problems emerged in 2015.
But Zodiac, which was taken over by French aerospace
firm Safran earlier this year, says the seats branch "contributed
positively" to the first-half operating income of the interiors division.
It says operational changes led to a "better
performance", particularly at its Seats UK and Seat Shells arms.
While the interiors division turned in an operating
loss of €97.3 million, this amounted to a €31.6 million improvement.
Zodiac says the result is partly due to
cost-reduction initiatives on programmes including the Airbus A350, the A320
Space-Flex modules, and the Bombardier CSeries, although the division was
affected by lower volumes and "persistent" delays to VIP and business
jet programmes.
Overall aircraft interiors sales were down by nearly
20% to €1.13 billion, of which almost 14% was organic.
Zodiac's aerosystems division performed better, with
increased profits over the first half, which enabled Zodiac Aerospace as a
whole to turn in a small operating profit of €35 million, in contrast to last
year's interim loss of €11.5 million.
It is forecasting a "significantly
stronger" performance in the second half in terms of revenues, operating income
and cash generation.
(Evangle Luo of TTFLY shared with you)