French manufacturer confident that recovery will lead to increased revenues in 2005
French aerospace manufacturer Snecma insists the weak US dollar will have only a "limited impact" on its 2005 results. The company's provisional sales for 2004 were up almost 6% on the previous year and Snecma expects that 2005 sales will increase further "on the strength of the expected recovery in product deliveries to the aviation sector".
The aero engines and equipment supplier - which plans to merge with French telecommunications firm Sagem - expects its consolidated net income to rise again this year, despite the weakness of the dollar, because of exchange rate hedges it has set up. But the company's cost-cutting programme, which aims to save €500 million ($650 million) by 2007, is also important in protecting its revenues from the weak dollar, analysts say.
One analyst predicts the company, which achieved a confirmed $1/€1 rate for 2004, will achieve a rate of $1.06/€1 for 2005, assuming that any new hedging contracts taken out from now on will be at a rate of $1.35/€1. "The deterioration may not seem a lot, but each cent could represent a loss of around €25 million," he says.
Snecma has recorded a year-on-year increase of 5.9% in its provisional sales figures, from c6.43 billion in 2003 to €6.81 billion for the year ending 31 December 2004. Sales for the propulsion division were 8.5% higher in 2004 than in 2003, at €4.52 billion, because of increased commercial engine deliveries and growth in its service business. Equipment sales were up 4.6% at €2.64 billion for the same period.
Snecma booked a consolidated total of €7.65 billion worth of orders in 2004, 23% higher than the previous year. Its orderbook stood at €13.8 billion at 31 December 2004, 9.5% higher than a year earlier.
HELEN MASSY-BERESFORD / LONDON
Source: Flight International
