© Stocksak. FILEPHOTO: The logo for Safran can been seen outside the headquarters of the company in Issy–les–Moulineaux near Paris on January 2, 2019. REUTERS/Gonzalo Fuentes/File Photo
PARIS (Stocksak), French jet engine manufacturer and aerospace supplier Safran (EPA: ) Friday raised its full year revenue and free cashflow projections after posting a 29.9% growth in third-quarter revenues due to a strong dollar.
Chief Executive Olivier Andries stated that the improved outlook was due to currencies and “confidence” in our ability to deliver, striking a contrast to Boeing (NYSE:), which had on Wednesday said that engines were its main output constraint.
Safran co-produces engines to the Boeing 737 with General Electric (NYSE:) through their CFM venture, which also competes with Pratt & Whitney to power the Airbus A320.
Engine makers have reported difficulty getting castings from two main suppliers. However, GE said this week that deliveries of CFM’s LEAP engines rose 50% over the quarter before.
Safran’s quarterly revenues increased 17.9% to 4.849 Billion Euros ($4.84 Billion) due to propulsion and interiors.
Safran said that it now expects full-year revenues of 19 billion euros to surpass the previous target of 18.2-18.4 Billion, on the basis of services growth as well as a stronger assumed dollar rate.
It projected 2022 free cashflow greater than the 2.4 million euros it had previously predicted. After a 36% increase of aftermarket sales dollars in the third quarter, it continued to predict 2022 civil aftermarket growth between 25-30%.
However, it warned about a possible dilution in operating margins due to a recent increase of the currency hedging books.
After entering exclusive negotiations in September, Safran stated that it expected to close Thales’s acquisition of its electrical systems activities in 2023.
It also announced plans for 2.2% share buybacks to protect against possible dilution by a convertible bond. It also stated that it would recommend the re-appointment to CEO Andries and Chairman Ross McInnes at its next annual shareholder meeting in 2023.
($1 = 1.0010 euros)