Airbus and Leonardo will in future use dollars as their accounting reference for their component supplies to their ATR joint venture in a bid to reduce currency-related headwinds for the twin-turboprop manufacturer.
Leonardo finance chief Alessandra Genco said during an 8 November results briefing that a decline in the dollar's value relative to the euro between January and September – versus the same period in 2017 – was one of several factors that led to reduced earnings at ATR.
The Toulouse-based joint venture has previously calculated costs using the euro, while aircraft are priced in dollars.
Genco says that a proportion of ATR's expenses – "mainly personnel costs" – will continue to be accounted in euros.
Nine-month revenue in Leonardo's aeronautics division – comprising aerostructures and aircraft production – declined 6.9%, to €2.03 billion ($2.3 billion).
Earnings before interest, taxes and amortisation were down 14.4%, to €167 million, which Genco attributes to a "softness" at ATR.
In addition to currency effects, the turboprop manufacturer generated lower-margin sales than last year and delivered fewer aircraft than previously planned, Genco says.
She notes that a reduction in aircraft deliveries to Iran Air – following the US government's reinstatement of sanctions against the country – has resulted in a lower financial performance at ATR.
Leonardo chief executive Alessandro Profumo says that he sees "no light at the end of the tunnel" in terms of returning the aerostructures operation to profitability.
But he says the division has turned a corner in terms of its industrial performance. Previous quality issues with the production of Boeing 787 components have been resolved and, Profumo says, Leonardo is no longer on "probation" with the US manufacturer over the supply of 767 structures.
He adds that discussions are still ongoing with Airbus about a revision of terms for the supply of A220 parts. The talks began with Bombardier when the Canadian manufacturer controlled the programme, previously known as the CSeries.
The first paragraph has been edited to specify which components will be accounted for in dollars
Source: FlightGlobal.com
