Airplane components manufacturer FACC Thursday reduced its profit margin forecast for its reduced 2019 fiscal year amid tough trading conditions in the aviation trade and brought an efficiency program to help attain its medium-term targets.
The Austrian headquartered group, controlled by China’s AVIC, now expects the margin on earnings before interest and tax in its 2019 fiscal year, which functions March-December, to come in between 5.2% and 5.7% after previously forecasting 6%.
FACC, which makes parts for wings, tail assemblies, and fuselages as well as engines and cabin interiors for all major plane manufacturers, also elevated its 2019 sales estimation to 668 million euros ($745 million) from 600 million euros.
The company’s profitability has recently been struck by higher than anticipated start-up costs for new meeting lines.
To boost profitability, FACC will spend as much as 50 million euros to streamline its supply chain and enterprise processes and bring the production of strategic elements in the house, it stated.
The provider is feeling the results of slowing airplane orders because of lingering fears of a financial downturn and U.S.-China commerce tensions.
Round half of FACC’s revenues come from Airbus, which reported higher airplane orders for 2019; however, it didn’t keep pace with deliveries after axing its A380 superjumbo program.
FACC may benefit from an initial trade agreement between the U.S. and China as Boeing is anticipated to get a major order for wide-body jets from China, along with its 787 or 777-9 models, or a combination of both, based on industry sources.