Feb. 26 (Bloomberg) -- Airbus Group NV said profit rose 21 percent last year and predicted further growth in 2014 as it lifts production of the best-selling A320 single-aisle jetliner.
Earnings before interest, tax and one-time items rose to 3.6 billion euros ($5 billion), exceeding a company target of 3.5 billion euros, according to Toulouse, France-based Airbus, which will lift A320 output to 46 a month in 2016 from 42 now.
Airbus delivered a record 626 planes in 2013 and is targeting a similar number this year as airlines seek more fuel-efficient models. Boeing Co. is lifting production of the 737, its rival to the A320, to 47 a month by mid 2017 to meet demand in a segment that forms the backbone of global fleets.
“Order intake was particularly strong for our Airbus commercial aircraft and provides a solid platform for the future growth of the group,” Chief Executive Officer Tom Enders said in a statement. “Strong demand allows us now to increase the single-aisle production rate.”
Airbus rose as as much as 3.6 percent and traded 1.7 percent higher at 54.01 euros as of 9:36 a.m. in Paris. The stock has declined 3.2 percent this year, valuing the company at 42.3 billion euros. Chicago-based Boeing is down 7 percent.
“Management has considerable credibility, and 2013 was a year of delivery for Airbus,” said James Buckley, a portfolio manager at Baring Asset Management in London. “The order pipeline is strong, and they have positive order flow.”
Group sales gained 5 percent to 59.3 billion euros in 2013, and Enders said reaching cash-flow break-even remains a target after a shortfall last year, when “execution issues” led to an outflow before customer financing of 515 million euros. Airbus aims to reach positive cash flow after 2015.
The namesake aircraft operation contributes two-thirds of revenue of revenue at Airbus, which adopted the unit’s name in a switch from European Aeronautic, Defence & Space Co. last month after it became clear that sluggish military sales would leave jetliners as the main driver for the foreseeable future.
Over the past seven years Airbus has steadily lifted A320-series rates, acclerating from 32 a month in the first quarter of 2007 to reach 40 early in 2012 and establishing the current level in October that year. Of those 42 jets, 22 are are built in Hamburg, 16 in Toulouse and four in China.
Airbus is preparing production of an updated A320, called the Neo, with two choices of more fuel-efficient engines. The first A320neos are set to enter service late in 2015.
Net income rose 22 percent last year after one-time charges. The order intake more than doubled to 218.7 billion euros and Airbus plans a 75-cents dividend, up from 60 cents.
In the fourth quarter, 434 million euros in charges were incurred from the new A350 wide-body plane and another 292 million euros for restructuring, mainly in space and military activities. For the year, charges reached 913 million euros.
The company said in December it would cut about 6,000 jobs in defense and space in France, Germany, Spain and U.K., including about 250 in corporate posts, principally in Paris.
Airbus said the A350 program remains challenging, and that cost-assumptions could lead to an increasingly higher impact on provisions. The planemaker, which has said it will deliver the first plane this year to Qatar Airways Ltd., has booked 814 orders from 39 customers for the twin-engine, long-range model.
The company’s financial hedging portfolio at the year’s end was worth $75.9 billion, compared with $83.6 billion at the end of 2012. Chief Financial Officer Harald Wilhelm today said that Airbus is fully covered for 2014.
In 2013 the company added hedges worth $15.8 billion at an average rate of $1.33 to the euro, compared with hedges worth $23.5 billion at a rate of $1.37 to the euro maturing in 2013.
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