Published - July 31st, 2023 @ 3:04 PM (GMT+2)
On Monday, Britain's Senior ( LON:SNR ), a leading supplier to Boeing (NYSE:BA) and Airbus, projected a vigorous second half of the year. The first six months saw the company's adjusted profits soar to £17.6 million ($22.62 million), a two-fold increase, thanks to the alleviation of supply chain issues in its aircraft parts sector and robust demand in the automotive and power unit.
Ending June 30, Senior's adjusted profits reached £17.6 million ($22.62 million), doubling from the previous period. Revenue also experienced a 20% growth, amounting to £482.3 million. This success is linked to the production increase by plane makers like Boeing and Airbus to cater to the booming demand for air travel.
H2 Sales Prospects:
Senior anticipates a rise in sales in H2, driven by "planned increases in aircraft build rate" and "anticipated lessening of supply chain challenges by year-end." Other aerospace engineers like Rolls-Royce and General Electric Co have also raised their profit forecasts, relying on a swifter-than-expected rebound from pandemic-induced lows.
Production Plans by Boeing and Airbus:
Boeing plans to augment the production of its top-selling 737 narrow-body jet to 38 jets per month, up from 31. Meanwhile, Airbus, the largest planemaker globally, has reiterated its target to manufacture 75 A320neo-family jets monthly by 2026. CEO David Squires sees a prolonged growth phase in aerospace, which he considers encouraging news.
Senior's flexonics division, specializing in fluid conveyance and thermal management components for vehicles, power, and energy applications, has witnessed a resurgence in sales and margins. The North America-centric unit is securing new electric vehicle contracts, and cost pressures are diminishing.
Second-Half Booking:
Senior has fully booked H2 in certain business segments. However, investors are cautious due to the potential risk of persistent supply chain issues. Shares in the London-listed company were down by 2.8% at 09:12 GMT on Monday.
Jefferies analysts commented, "Aerospace has advanced, but the well-known supply chain challenges continue to limit near-term growth/EBITA margin recovery potential."
Conclusion:
Senior's impressive H1 results and optimistic H2 outlook mirror the overall resurgence in the aerospace and automotive industries. The company's growth, in alignment with industry behemoths like Boeing and Airbus, indicates a positive market trend, notwithstanding the ongoing supply chain hurdles.
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