Restructuring costs of plant closure and redundancy payments contributed to aircraft interior specialist's poor year

Aircraft interiors specialist B/E Aerospace suffered a $104.1 million net loss last year. The results included a $104.7 million "restructuring cost" for plant closure and redundancy payments following 1,000 job cuts - one-fifth of its workforce - last October in response to the downturn in civil aviation.

Sales rose slightly, to $680 million in fiscal year 2002 (year ending 23 February, 2002) from $666 million in 2001 - marginally worse than the company's revised forecast of $696 million after the 11 September attacks (Flight International, 30 October - 5 November 2001).

The company was unable to produce much cheer for 2003, predicting that sales will fall still further to $650 million. Chief executive Robert Khoury attributed the drop to cost cutting by airlines, which had led to postponements of cabin refits and large-scale grounding of aircraft. "This has constrained demand for our products, a situation which we expect to continue for some time."

With most restructuring complete, B/E should make a net profit this year of around $20 million. Much of its $160 million cash pile will be needed to service its $695 million net debt. The company is highly geared, with a debt-equity multiple of 175%, and spent $60 million on net interest last year. No plans to reduce this debt have been announced.

Source: Flight International