Deliveries of 31 completed ATR turboprop aircraft compared to ten in 2020 have helped to reduce losses for its Italian shareholder Leonardo, but overall the company and Tier 1 supplier to Airbus and Boeing can look back at a difficult year for its commercial aerostructure programs. Lower production rates hurt Leonardo Aerostructures.
Leonardo improved EBITA for the ATR program to €-24 million from €-69 million in 2020. While aircraft deliveries were up, the company produced fewer fuselage sections: fifteen versus 26 in 2020. Yet, ATR is showing a quick recovery. Leonardo repeated its forecast of last November that the turboprop maker from Toulouse will ramp up production to fifty aircraft per year from 2024. This year, deliveries will be in the “mid-thirties”, as ATR already said during its own press conference on February 8.
Leonardo’s aerostructures business faired less well in 2021 and produced a €-203 million EBIT compared to €-86 million in the previous year. Revenues were €442 million, down from €819 million. The best-performing programs were the Airbus A220 and A321neo, albeit at reduced numbers as Airbus lowered its production since mid-2020. Only since mid-2021, rates have gone up again and are set for a further increase from mid-2023.
The delivery pause of the Boeing 787 over manufacturing quality issues hit Leonardo hard. The Italians delivered only 26 fuselage sections and sixteen stabilizers for the Dreamliner program compared to 105 and 72 respectively in 2020. The lack of new orders further affected results. By revenue, the 787 made up 31 percent of Leonardo’s aerostructures revenues compared to eighteen percent for the Airbus A220./A321neo, sixteen percent for the Boeing 767, fourteen percent for ATR, and 21 percent for military programs.
Leonardo continues the restructuring of Aerostructures as outlined in November and which includes a reduction of the workforce by 1.000, the modernization of the production for ATR, and increased use of digitalization. Thanks to the recovery in the turboprop and single-aisle market, the OEM expects lower cash costs and better profitability. The outlook for the widebody programs is less positive, with break-even for the 787 expected with the delivery of the 1.406th fuselage to Boeing. The recently announced agreement with Vertical Aerospace on the development and production of the VX-4 fuselage offers new opportunities for Leonardo and should contribute to Aerostructures breaking even in 2025.
Leonardo reported a Group net profit of €587 million versus €243 million in 2020. EBIT was €911 million versus €517 million, revenues €14.1 billion compared to €13.4 billion, and a free operating cash flow of €209 million versus €40 million. The company has €5.4 billion in liquidity available through cash plus new and existing credit lines. It reduced its gross debt by twenty percent to €3.6 billion.
The Italian company said that it currently has no significant exposure in either Russia or Ukraine: only €30 million on the balance sheet is coming from Russia and nothing from Ukraine. Its backlog from Russia is valued at €25 million and from Ukraine at €8 million.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.
