Airbus reported a 49 per cent plunge in first quarter adjusted operating profit amid the "gravest crisis the aerospace industry has ever known."
The plane maker's adjusted earnings before interest and tax fell to €281 million (Dh1.1 billion), from the year earlier period, Airbus said in a statement on Wednesday.
First-quarter revenue dropped 15 per cent year-on-year to €10.6m. Airbus made a net loss of €481m in the first quarter, from a profit of €40m in the same quarter last year.
"We saw a solid start to the year both commercially and industrially but we are quickly seeing the impact of the Covid-19 pandemic coming through in the numbers,” Guillaume Faury, Airbus chief executive, said. "We’re focused on the resilience of our company to ensure business continuity.”
Plane manufacturers, airlines and suppliers have been hit hard by the coronavirus crisis that has decimated air travel demand and is set to plunge the global economy into its deepest recession since the Great Depression of the 1930s. The pandemic has led airlines to slash capacity at unprecedented levels and grounded more than half of the world's fleet. Plane makers are grappling with a collapse in demand for new aircraft as cash-strapped airlines negotiate a deferral or cancellation of existing orders.
The Toulouse-based plane maker reported a negative cashflow of €8bn euros, including a €3.6bn penalty to settle bribery investigations in Britain, France and the US.
"We’re adapting commercial aircraft production rates in line with customer demand and concentrating on cash containment and our longer-term cost structure to ensure we can return to normal operations once the situation improves," Mr Faury said.
Europe's biggest aerospace group said it is taking a number of measures to preserve cash and reduce cash outflows.
Airbus is reducing its capital spending by around €700m to reach a total capex of €1.9bn. It will also defer or suspend activities that are not critical to business continuity and to meeting customer and compliance commitments.
In March, the company took measures to mitigate the impact of Covid-19, including securing a new €15bn credit line and withdrew its 2019 dividend proposal. It also withdrew its 2020 profit guidance.
Airbus delivered a total of 122 aircraft in the first quarter, down from 162 planes in the same quarter last year, while around 60 aircraft could not be delivered due to the Covid-19 pandemic. In April, Airbus said it will reduce its average monthly production rates by about a third of its pre-crisis levels.
The company said it cannot yet provide a full financial outlook for the full year.
"The impact of Covid-19 on the business continues to be assessed and given the limited visibility, in particular with respect to the delivery situation, no new guidance is issued," Airbus said in the statement.
US rival Boeing is also expected to report its results on Wednesday.
