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Zodiac interiors division showing gradual financial improvement

Zodiac Aerospace's troubled seating business is showing signs of recovery despite sales over the first half deteriorating by more than a quarter.

The company says sales for its seats branch – part of its aircraft interiors division – were down by 26% to €449 million ($548 million). This included an organic decline of 21.8%.

Zodiac says it had been expecting the slump, because the figures were affected by commercial impact from "previous design and execution issues".

The company had been forced to take action after serious production problems emerged in 2015.

But Zodiac, which was taken over by French aerospace firm Safran earlier this year, says the seats branch "contributed positively" to the first-half operating income of the interiors division.

It says operational changes led to a "better performance", particularly at its Seats UK and Seat Shells arms.

While the interiors division turned in an operating loss of €97.3 million, this amounted to a €31.6 million improvement.

Zodiac says the result is partly due to cost-reduction initiatives on programmes including the Airbus A350, the A320 Space-Flex modules, and the Bombardier CSeries, although the division was affected by lower volumes and "persistent" delays to VIP and business jet programmes.

Overall aircraft interiors sales were down by nearly 20% to €1.13 billion, of which almost 14% was organic.

Zodiac's aerosystems division performed better, with increased profits over the first half, which enabled Zodiac Aerospace as a whole to turn in a small operating profit of €35 million, in contrast to last year's interim loss of €11.5 million.

It is forecasting a "significantly stronger" performance in the second half in terms of revenues, operating income and cash generation.

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