Aircraft

French engine manufacturer and electronics supplier Safran (formerly Snecma and Sagem) has posted a 4.7% increase in full year 2005 sales to €10.6 billion ($12.6 billion) with record engine orders boosting the company’s order book by 12% year-on-year to €12.6 billion.

The group is forecasting a continuing increase in sales and improved earnings before interest and tax in 2006, as it predicts growth in its aviation business “in terms of production, as well as spare parts and services.”

The group booked a “record” 1,640 CFM56 engine orders in 2005, along with 1,250 helicopter engine orders. Aerospace propulsion, which accounted for 43% of Safran’s sales, saw a 4.1% year-on-year increase to sales of E4.5 billion. Aircraft equipment sales – 24% of the group as a whole – grew 13.1% with sales of €2.5 billion.

Earnings before interest and tax were up 9% at €762 million, but slightly below analyst forecasts. “The overall improvement in productivity and growth in volumes, especially for spare parts, more than offset difficulties experienced by the communications business,” Safran says.

Sales for the group’s communication’s division – which accounts for nearly a quarter of its total sales - were 2.6% lower year-on-year, at €2.3 billion. But Safran is positive on the division’s 2006 outlook: “The actions undertaken to restore the performance of the communications branch should achieve results.”

The group continued to suffer from the impact of the euro/dollar exchange rate - with a constant dollar, overall revenues would have been up by 6.2%, the Paris-headquartered company says.

Safran says it has prepared the results as if the merger of Snecma and Sagem – which was completed in May last year - had taken place at the start of 2004, to ease year-on-year comparison.

HELEN MASSY-BERESFORD / PARIS