CASH, RESTRUCTURING BODE WELL FOR THALES
Thales will this week confirm a 2010 operating loss of €100 million ($135 million) after taking a remarkable €700 million charge against its troubled supply contracts with the Airbus Military A400M, the Turkish Meltem maritime patrol aircraft and a Danish ticketing project. Full-year results will show the aerospace, defence and transport electronics and systems group with revenue up 2% at €13.1 billion, a rise owing mostly to favourable exchange rate movements - the top line would have dipped 1% at constant scope and exchange rates. Cash generation is a bright point; after ending 2008 with a €456 million cash hole improving to €91 million net debt in 2009, 2010 closed with €191 million in the bank and 2011 is also forecast to be positive. The company has also taken steps to avoid more contract disasters. Chief executive Luc Vigneron told analysts there is now a strict regime in place that sees engineering and sales closely allied in all contract negotiations to ensure delivery is manageable. Although order intake last year was down 6% to €13.1 billion but the expected pressure on European defence budgets was partly offset by the upturn in commercial aeronautics and what Vigneron calls an "exceptional" intake level in space. The order book closed the year at €25.4 billion, up 3%. Vigneron is also promising a new era of profitability for Thales, which he admits has spent a decade lagging its European peers. He forecasts 2011 earnings before interest and taxes at 5% of revenue after restructuring charges of about 1.5%, rising to 6% in 2012 after charges of about 1%. By 2014, he told analysts, EBIT margins should match Thales's peer group, a level taken to be in the 9-10% range.
INDIA EYES HINDUSTAN AERONAUTICS SALE
India's state owned aeronautical and defence major Hindustan Aeronautics may be at least partially privatised. Finance director D Shivamurti says an initial public offering "would give us an impetus for growth and improve standards". HAL holds Rs90 billion ($2 billion) in cash and turned a 2009-10 after tax profit of Rs19.8 billion.
RUSSIAN HELICOPTERS BIDS FOR 100% OF KAZAN
Oboronprom's Russian Helicopters business, which owns 87.7% of Kazan Helicopters, has made an offer for the remainder of the company.
SERBIA IN NEW BID TO SELL JAT AIRWAYS
The government of Serbia is to select a new adviser to oversee the privatisation of flag carrier Jat Airways and hopes to complete the sell-off by the end of this year. Jat underwent a failed privatisation attempt in 2008 and the government has been trying to restructure the airline to attract a prospective strategic partner.
BAE's L-1 MOVE CLEARS PATH FOR SAFRAN MERGER
BAE Systems has completed its $297 million acquisition of L-1 Identity Solutions' Intelligence Services Group, clearing the way for the rest of L-1 to merge into Safran's Morpho subsidiary.
BANGALORE MAY GET AEROSPACE UNIVERSITY
The government of the south Indian state of Karnataka, whose capital Bangalore styles itself the "aerospace hub of south Asia", is exploring the possibility of setting up an aerospace university. "We will face a huge shortage of skilled human resources in realising the ambitious plans in the aerospace sector," warns chief secretary S V Ranganath.
Source: Flight International
