Julian Moxon/PARIS
AEROSPATIALE IS heading towards break-even, says President Louis Gallois, but he warns that the group plans to step up its cost-cutting efforts to offset the weakness of the US dollar.
In his annual roundup of the group's activities, Gallois revealed that the group is looking for savings of "at least" Fr3 billion ($600 million) over the next three years, as part of an accelerated restructuring effort.
The costs of restructuring and pending reductions in the French defence budget will leave the state-owned manufacturer showing a net loss for 1995, but at pre-tax level the group should come close to break-even, says Gallois.
He adds that Aerospatiale reduced its debt by Fr1 billion over the year, taking it down to Fr6.6 billion, while orders soared by nearly one-third from their depressed levels of Fr29 billion over the previous two years. Sales edged up slightly, to Fr49 billion.
Gallois says that one of the main objectives for 1996 is to close the gap between orders and sales. He adds, that the group will also "pursue the opening of our capital, to strengthen our balance sheet". Alcatel Alsthom, Matra-Hachette and Dassault Aviation are among the French companies tipped to compete for a stake of up to 10% in Aerospatiale.
Reviewing a "difficult but promising year", Gallois adds that Aerospatiale set a new record for launcher and satellite orders, but its military business was hit by Eurocopter's failure to win the UK and Netherlands attack helicopter business and by poor missile-sales.
Airbus Industrie, which accounts for 40% of Aerospatiale's sales, also had a difficult year, he says, complaining that Airbus suffered "unfair competition" in the wide-body market, where "unrepresentative" engine prices brought down the cost of the Boeing 777.
Aerospatiale's aircraft-maintenance subsidiary Sogerma-Socea has purchased a controlling interest in Revima, the Air France maintenance unit whose chief activities include work on landing gear, auxiliary power units and engines.
Sogerma-Socea, which took a 70% majority stake in the maintenance unit at an undisclosed price, is also conducting talks on the merger of the French airline's industrial centre in Toulouse, into a joint venture for overhaul of its Boeing 737 and Airbus A320 fleets. The move is part of a major Air France restructuring effort.
Revima had sales totalling Fr453 million in 1994, compared with Sogerma-Socea sales of more than Fr2.8 billion.
Source: Flight International
