UK aerospace supplier Melrose raises profit outlook
The owner of GKN Aerospace, which counts Airbus and Boeing as its top customers, has recovered strongly from the pandemic lows
Bengaluru — British aerospace supplier Melrose raised its profit outlook for this year by £30m on March 7, buoyed by pent-up demand in civil aviation, after it posted a surge in 2023 profit ahead of market view.
The owner of GKN Aerospace, which counts Airbus and Boeing as its top customers, has recovered strongly from the pandemic lows, due to increased airline traffic and easing supply chain troubles.
However, the recent Boeing 737 MAX 9 crisis has tempered industry expectations of a faster rate of profit growth.
The US planemaker came under fire from regulators and lawmakers after a January 5 mid-air blowout on a Boeing 737 MAX 9 that rocked the aerospace industry.
Melrose, which supplies airframe structures and engine components to the aerospace sector, said there remained revenue headwinds from industry-wide supply chain issues, as well as short-term destocking due to the phasing of commercial aircraft build rates, and the effect of planned exits and disposals in its structures division.
Melrose, which spun off its auto and other businesses in 2023 to become a pure-play aerospace supplier, said adjusted operating profit from continuing operations for the year ended December 31 2023 surged more than three-fold to £390m ($496.6m), ahead of LSEG analysts’ average estimates of £327.2m.
The company proposed a final dividend of 3.5p a share for 2023.
Reuters