MTU Aero Engines operating profit up 40% in second quarter, beating expectations
The Airbus (AIR.PA), opens new tab and Boeing (BA.N), opens new tab supplier said its adjusted earnings before interest and taxes were 357 million euros ($420.22 million) in the quarter, above last year's 252 million euros and exceeding analysts' forecasts of 300 million euros in a company-provided consensus.
"A profitable revenue mix in series production with a high proportion of spare and lease engines bolstered earnings, as did high spare parts sales,' CFO Katja Garcia Vila said in a statement.
In June, MTU said delays in aircraft deliveries from Airbus and Boeing resulted in older engines staying in service longer, benefiting its maintenance, repair and overhaul (MRO) business.
Fewer aircraft deliveries reflect positively on the German engine manufacturer, as new engine models are loss making.
The Germany-based company had an order backlog of 25 billion euros as of June 30, down 13% compared to December of last year.
However, $1.75 billion in Paris Air Show orders were not yet reflected in the backlog, the company said in a statement.
($1 = 0.8495 euros)
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The Guardian
11 minutes ago
- The Guardian
Air India under growing pressure as safety record scrutinised after deadly crash
Just three years ago, it looked as if the fortunes of Air India were finally looking up. After decades of being regarded as a floundering drain on the Indian taxpayer, with a reputation for shabby services and dishevelled aircraft, a corporate takeover pledged to turn it into a 'world class global airline with an Indian heart' that would outgrow all its domestic and international competitors. Yet, after tragedy struck on 12 June, the airline is instead facing critical questions about its ability to operate safely, throwing its long-term ambitions into jeopardy. It was less than a minute after Air India flight 423, bound for London, took off from Ahmedabad airport that it lost momentum and dropped from the sky, exploding into flames, killing 241 people on board and 19 on the ground. So far, only a preliminary report into the crash by the Indian aviation authority has been released, which found that both switches that controlled fuel going into the engines were cut off just after take-off, causing the plane to fatally lose altitude. Focus has reportedly turned to the actions of the pilots, amid unanswered questions over whether the switches were moved manually or due to a faulty mechanism. The report did not recommend action against Boeing, the manufacturer of the plane. In the weeks after the crash, Air India has faced growing scrutiny after attention has turned to its own recent alleged chequered safety record. Last week, the Indian government began holding direct meetings with senior Air India management, calling for better oversight on safety and engineering. It came as India's aviation watchdog issued four show-cause notices to the airline last week, citing 29 safety-related violations over the past year. These breaches include lapses in crew duty norms, fatigue management and training oversight. They were based on disclosures made by the airline itself. 'Despite repeated warnings and earlier enforcement measures, systemic problems in compliance monitoring, crew scheduling and training oversight remain unresolved,' stated one notice. The aviation watchdog warned the airline that continued non-compliance could leave them facing heavy financial penalties or even the removal of senior executives. It also emerged that in the days after Air India 423 crash, over 100 Air India pilots went on medical leave, leading to questions over the company's handling of the welfare and morale of its pilots. One senior Indian government official with direct knowledge of the notices told Reuters the administration was concerned that 'Air India is taking things for granted' adding: 'We have given them many warnings.' Air India acknowledged receipt of the notices. 'We will respond to the said notices within the stipulated period. We remain committed to the safety of our crew and passengers,' they said in a statement in response. It was late 2021 when one of India's largest conglomerates the Tata Goup – which founded the airline back in 1932 – agreed to pay about $2 to buy back Air India from the government, pledging to restore it to its former glory. For decades, the legacy Indian airline had languished under state ownership and overturning years of neglect and underfunding was seen as a gargantuan task; at the time of the takeover; its newly appointed CEO Campbell Wilson said the airline was in an 'absolute shambles'. But Tata immediately began to make major moves to invest in, modernise and expand Air India's fleet. Billons of dollars worth of new planes were ordered and it began a multimillion dollar refit of some of its older planes. A merger was also announced with an emerging, successful airline Vistara. Recently the airline had shown signs that its losses were narrowing. However, while the cause of the crash in June has yet to be confirmed, it has already proved damaging for Air India and Tata, shaking consumer confidence and shining a light on a series of operational challenges and mishaps involving their aircraft. Over the past six months, Air India received 13 notices for multiple safety violations and incidents. Recent incidents included a fire in the power unit of an Airbus A321 that had just landed from Hong Kong to Delhi, a Kochi-Mumbai flight that veered off the runaway and suffered damage to an engine cover, and a Delhi-Kolkata flight was forced to abort take-off at the last minute. Despite the pledged upgrades, customer complaints about the standard of Air India aircraft – including dishevelled and uncomfortable interiors, broken armrests, faulty entertainment systems and frequent delays on international flights – have also continued, sometimes with significant consequences; in March, Air India Flight 126 from Chicago to Delhi had to turn back after 10 hours when 11 out of the plane's 12 toilets became clogged. In June last year, hundreds of cabin crew working for Air India express went on strike over working conditions. The budget airline is also now under investigation by the EU's aviation agency after reports it did not change the engine parts of an Airbus A320 in a timely manner. In a memo to Air India staff after the release of the preliminary report into June's crash, CEO Wilson emphasised that it had found 'no mechanical or maintenance issues with the aircraft or engines, and that all mandatory maintenance tasks had been completed'. Air India also found 'no issues' with the fuel switches after it completed a full inspection of its Boeing planes. A full report is due next year. Jitender Bhargava, a former Air India executive, said that most major international airlines had faced similar periods of scrutiny but emphasised that the airline had a responsibility to be open and transparent. 'They need to clearly spell out what steps they are taking: for the families of the victims who want closure, for the operators of Boeing planes who want answers and for the millions and millions of people who watched footage of that plane come crashing to the ground on their televisions around the world,' he said. Nonetheless, Bhargava believed this would only be a 'temporary setback' for Air India's ambitions. 'It's always the case that after such an incident, the regulatory agency is on their toes and an airline faces greater pressure surveillance for its safety record,' he said. 'It's not a reflection on the overall safety track record of Air India.'
Telegraph
11 minutes ago
- Telegraph
Quiet luxury is out and that's great news for Burberry
Questor is The Telegraph's stock-picking column, helping you decode the markets and offering insights on where to invest After a wild and scary ride, we are back to breakeven in our Burberry position. This gives us the option to check out of the British fashion icon without any undue portfolio damage, but it is early in the turnaround sought by chief executive Joshua Schulman. For the moment, we are inclined to give him and the company the benefit of the doubt, even if the headline financial figures do not entice at first glance. This month's first-quarter trading update was no great thing of beauty either. Comparable store sales for the three months to June fell 1pc year on year at the retail arm, and that came on top of a 21pc plunge in the equivalent period a year ago. Yet that was still better than the analysts' expectation of a 3pc decline. Moreover, it does seem as if things have stopped getting worse, and if they have stopped getting worse then at some stage they might just start getting better – especially if Mr Schulman's plans to reinvigorate the brand and product ranges come to fruition. At least 'quiet luxury' is out, according to this columnist's daughter's editions of Vogue, and a return to favour for luxury would at least provide a more encouraging backdrop, despite the uncertain macroeconomic environment. Last year's operating loss and absence of a dividend mean investors have to buy into the turnaround plan for them to be even vaguely optimistic about Burberry's share price maintaining its momentum – it is up 85pc in a year and by more than double from the autumn 2024 lows. A price-to-earnings ratio of more than 80 for the year to March 2026 and forecasts of a 6pc operating margin show just how much work the luxury goods specialist has to do after a terribly difficult two years. Analysts only expect a 12pc operating margin by March 2028, well below the 20pc-plus return on sales generated by leading plutocratic product makers such as LVMH and Richemont. A return to the 16pc level that prevailed between 2016 and 2021 would leave Burberry on 17 times 2028 earnings, and a dash to 20pc would put it on a tempting 13 times. Again, we are long way from that, but the worst may be behind Burberry and patience could yet get a reward. Questor says: Buy Genus (GNS) £24.75 We are off to a fast start with Genus and already have a paper gain of around 25pc to show for our initial analysis back in spring. This month's year-end update reads well and offers more than enough hints to suggest that our investment thesis for the genomics expert is still on the mark. The trading statement revealed that adjusted pre-tax profit for the year to June 2025 would be at least £72m, even though unhelpful foreign exchange movements cost the company some £8.4m. Of Genus' two divisions, Pig Improvement Company (PIC) continued to perform strongly, and the bovine-oriented American Breeders Service (ABS) showed some signs of improved momentum. In the latter case, things can hardly get any worse given that US cattle inventory languishes at 70-year lows. Any upturn here could bring benefits to ABS. Its expertise in genomics helps dairy farmers increase the chances of cows giving birth to female calves suitable for dairy production or young more suited to beef production. Perhaps most importantly of all, the trading statement flags the first tangible benefits of American regulatory approval from the Food and Drug Administration (FDA) for Genus' PRRS (Porcine Reproductive and Respiratory Syndrome) Pig Resistant Programme (PRP). FDA approval opens the way to the commercialisation of PRP and is already triggering milestone payments from partner companies, as evidenced by the £3.7m received from Beijing Capital Agribusiness. Such payments should help cash flow, too, and, as a result, chief executive Jorgen Kokke signals a reduction in net debt in this month's update. This is a further boost for the investment case, as Genus' record for free cash flow generation in the past few years is spotty at best. If the investment in PRRS starts to pay off, then cash flow could blossom and a reduction in debt would reduce net interest costs and provide a further kicker to profits growth. As it is, the forecast of £72m in pre-tax income for the fiscal year just ended would be a record for the FTSE 250 index member, yet the share price still stands at less than half 2021's peak, even after the recent run.
Sky News
39 minutes ago
- Sky News
Revealed: The scale of cheap Chinese imports flown into UK without paying any tariffs
The scale of cheap Chinese e-commerce imports flown into Britain without paying any tariffs has become clearer following a Sky News investigation into this new multi-billion pound phenomenon. We have uncovered the first official estimate of the value of so-called "de minimis" imports into Britain, ahead of an official inquiry into whether this legal clause - which excludes packages worth less than £135 from paying customs duties - should be allowed to continue. Companies like Shein and Temu have become big players in British retail, not to mention elsewhere around the world, by manufacturing cheap products in China and then posting them directly to consumers, benefiting from the de minimis rules. Clothing manufacturers in the UK claim that de minimis makes it nearly impossible to compete with these Chinese competitors, raising questions about the viability of domestic textile and apparel production. However, economists argue that the main beneficiaries of the policy to exclude cheap imports from customs are lower-income households, since it allows them to spend less on their shopping. Removing it, they say, would disproportionately affect poorer families. The government has committed to an inquiry into the rules, which are also being changed in the EU and the US, but up until now there has been no official estimate of its scale. According to HM Revenue and Customs data released to Sky News following a Freedom of Information request, the total declared trade value of de minimis imports into the UK in the last fiscal year (2024-25) was £5.9bn. That was a 53% increase on the previous year (£3.9bn), underlining the scale of growth of e-commerce imports into the UK. While it is hard to gauge how much revenue this means the Treasury has forgone, an illustrative 20% tariff on flows of that order could raise more than £1bn. While that sum alone would not fill the fiscal black hole faced by Chancellor Rachel Reeves in the coming budget, it would nonetheless be nearly enough to pay for the government's recent U-turn on winter fuel allowances. Sky has also obtained the first television access deep into the supply chain, helping bring those goods into the UK, as it boarded a flight that had just travelled from Chongqing to Bournemouth Airport. We filmed inside the belly of a plane belonging to European Cargo, one of a number of air cargo firms booming as a result of these trade flows. The untold story about de minimis is that it hasn't just had an impact on shopping habits in the UK, or for that matter, the textiles manufacturing sector - it has also changed patterns of distribution. Struggling regional airports that never saw their passenger numbers recover after the pandemic are now re-establishing themselves as hubs for cargo. European Cargo is now the single biggest airline at Bournemouth Airport, despite not carrying a single passenger. Other regional airports like East Midlands Airport and Prestwick in Scotland are seeing rapid growth in flows of trade. All of which raises the stakes for the government's inquiry into the de minimis system. At present, there is no timeline for its decision, but removing the clause would have far-reaching effects across the economy.
