Profits have nosedived but orders taking off
Trains put strain on Bombardier but plane demand is buoyant
Published 22/02/2013 | 04:20
Aeroplane and train maker Bombardier has reported a 93% dip in its fourth quarter earnings but confirmed the first test flight of its new CSeries aircraft will go ahead in June as planned.
The Canadian firm blamed restructuring costs in its transportation division, which mainly makes trains, on the profit slide but news of progress with the CSeries will boost Northern Ireland as the aircraft's wings will be made at the company's Belfast base.
That has been tempererd slightly by news that the rollout of the Learjet 85 business jet has been delayed and the aircraft won't be in-service until summer 2014, rather than later this year along with the earnings slide. "Our results for 2012 are not reflective of our potential," said Pierre Beaudoin, President and Chief Executive Officer of Bombardier.
"After proving our resilience throughout the economic crisis, today, Bombardier is at a turning point."
Fourth quarter 2012 earnings fell to just $14m (£9m) from $214m (£140m) at the same time last year, despite a £0.5bn boost to revenue.
Much of that was taken up with a $119m (£78m) restructuring charge, mostly related to cost cutting at the transport division which primarily makes trains.
But despite the dip in performance, Mr Beaudoin remained confident for the company's future, particularly given the strong order book.
"With our outstanding backlog of $66.6bn (£43.7bn), an increase of 19% over last year, we're forging ahead with breakthrough products and expanding our reach in pivotal growth markets," he said.
That backlog includes orders for 343 business jets, in which Bombardier is a world leader, for 2012 as a whole compared to just 191 in 2011.
Many of the parts for the company's business jets are made in Belfast.
"In Aerospace, we were in line with our delivery guidance and we've garnered an impressive 481 net orders bringing our backlog to a record level of $32.9bn (£21.5bn) at the end of 2012."
Mr Beaudoin said: "We're the clear leader in business aviation both in terms of revenues and deliveries, and in commercial aircraft, we had some significant orders for both jets and turboprops.
"Our development programs are making solid progress and the CSeries' first flight will take place by the end of June 2013."
The company's commercial aircraft division, which includes the CSeries range of aircaraft, took 138 firm orders in 2012 compared to 54 in 2011.
"The CSeries aircraft program development is progressing steadily: the assembly of the first Flight Test Vehicle in Mirabel, Québec, is in the advanced stages with all primary structures now assembled on the aircraft," the company said in a statement.
"Key components and systems are in place, namely the wing, landing gear, horizontal/vertical stabilizers, and most recently, the engines as we proceed with ongoing systems installations."
Bombardier also announced that Moscow-based Ilyushin Finance Co (IFC) has agreed to buy 32 CS200 aircraft, worth £1.7bn, with options for an additional 10 CS300 worth around £0.5bn.