Cape Town ­ Airbus Military wants to delay for 18 months a R3bn refund it owes SA, which cancelled a contract to buy Airbus A400 transport aircraft in 2009, Parliament’s public accounts committee was told yesterday.

Startled MPs were told Airbus was unable to make the payment in a lump sum and was pleading for repaying it over a period, raising the thought the European aircraft maker was cash strapped.

The predelivery payment by SA became due once the contract was cancelled, but for more than a year arms procurement agency Armscor has been negotiating with Airbus about repayment of the R3bn. SA agreed to buy eight of the A400 aircraft but escaped from the contract when it became unaffordable in the recession.

During a meeting of the committee Democratic Alliance MP David Maynier asked Defence Minister Lindiwe Sisulu and her delegation under Defence Secretary Mpumi Mpofu whether or not Armscor had bungled the repayment negotiations with Airbus .

When Ms Mpofu said Airbus had pleaded for a repayment schedule, Mr Maynier reacted with disbelief saying "that is loose change" for a company like Airbus and "I simply can’t believe that they don’t have R3bn".

Ms Sisulu said that Armscor was "haggling hard" with Airbus for the return of the money.

Airbus’s local spokesman Linden Birns confirmed the company’s legal team was still engaged with Armscor’s legal team over the termination of the contract.

"I can also assure that Airbus Military is not broke," he said.

With acknowledgements to Wyndham Hartley and Business Day.

This is patent nonsense - refer article below.

This year EADS made an operating profit (gross profit) of Euro 1,231 billion (about R11,7 billion) and a nett profit of Euro 0,533 billion (about R5,1 billion).

EADS could have repaid out of current year's nett profit and still had R2,1 billion to spare and even paid a small dividend to its voracious shareholders.

They are surely in negotiations squealing one for ye, one for me and one for the ayenceeeeeeeeeeeeeeeeeeeeeeeeeebeebeebeebeebeebeebeebeebeeheeheehee .
 

Airbus order surge lifts cash-rich EADS

Written by Reuters Thursday, 10 March 2011 11:14
http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=14039:airbus-order-surge-lifts-cash-rich-eads&catid=7:Industry&Itemid=116


Airbus parent EADS returned to profit in 2010 and bagged a slew of new aircraft orders, pushing its shares up even as airlines fretted about surging oil prices.

Slightly better than expected 2010 results marked a sharp reversal from a year ago, when Europe's largest aerospace company was pushed into the red by a crisis over military aircraft delays and saw only lacklustre prospects for recovery.

But a US$31 billion (19 billion pounds) slew of commercial airplane orders in the past 36 hours, about half of which will benefit Airbus with the rest scooped up by rival Boeing, highlighted growth in emerging markets which planemakers see as a recession cure.

"The commercial market has seen an impressive rebound, especially in the growth-hungry emerging markets," Finance Director Hans Peter Ring said.

EADS shares were up 2 percent at 20.234 euros (17 pounds) by 1:53 p.m. MT, the top gainers on the French benchmark CAC40 index, after earlier rising as much as 4.2 percent.

That was despite an increase in oil prices that saw Qantas Airways and Singapore Airlines raising fuel surcharges, while Cathay Pacific warned growing energy costs could hurt its profits.

"Oil prices provide a short-term pressure for airlines, but in the long term they provide pressure to renew their fleets," EADS Chief Executive Louis Gallois said.

Brent crude oil prices rose 79 cents on Wednesday to just under $114 a barrel. EADS said it would need to monitor developments in North Africa, oil prices and currencies.

Russia's Aeroflot and Cathay Pacific wrote cheques for Airbus or Boeing jets on Wednesday, extending a flow of deals that included a provisional 100-jet order for a fuel-saving Airbus model from leasing giant ILFC on Tuesday.

But there was uncertainty over the impact of Libyan unrest on the economy and potentially awkward questions for EADS as it tries to complete a one-year-old deal to receive cash from European governments for its troubled Airbus A400M aircraft.

Downpayments from airlines handed Franco-German-led EADS a record cashpile of 12 billion euros at the end of 2010.

"The problem is that they went cap in hand to European governments who agreed despite the financial crisis to give money for the A400M, including 1.5 billion euros in cash," said a leading European aerospace analyst, asking not to be named.

From a financial point of view, with cash generating next to no return compared with the cost of equity or debt, analysts say the trove of cash makes little financial sense.

"It seems like a large number to be sitting on," Societe Generale's Zafar Khan told company leaders in a conference call.

EADS officials said one reason for the 2 billion cash increase in the past year was a rebound in financial markets, which had dampened the need for Airbus to finance its clients.
They also said there were no plans for a share buyback.

ACQUSITIONS PLANNED

Instead, EADS aimed to breathe new life into longstanding plans to embark on acquisitions, especially in the United States, where it hopes to expand its presence after losing a contest with Boeing to supply tankers to the Air Force.

"I think you will hear something on that in 2011," Finance Director Hans Peter Ring said of acquisitions, adding that the company's previously stated target of 1-2 billion euros in acquisitions was "not a magic figure."

Ring told journalists contacts had been made "across the Atlantic" but declined to elaborate.

Chief Executive Louis Gallois said EADS would "probably" first seek to build a U.S. pillar for its activities alongside Europe and emerging markets, but could also expand in Europe.

However, he noted that French defence group Thales, which EADS once tried to buy, was "not for sale."

EADS posted higher than expected 2010 revenue of 45.8 billion euros ($63.65 billion), up 7 percent, and operating profit of 1.231 billion euros. It restored a dividend of 22 euro cents after posting a net profit of 553 million euros.

Analysts were expecting EADS operating profit of 1.236 billion euros on revenue of 44.681 billion and net profit of 500 million, according to a Reuters poll.

In 2009, EADS sank to a net loss of 800 million euros after taking provisions on delays to the Airbus A400M military plane.

For 2011, EADS predicted unspecified growth in revenue and said operating profit before one-off items would be stable, compared with 1.3 billion euros in 2010.

Industry analysts say the company's core industrial shareholders, Germany's Daimler and Lagardere of France, will be unwilling to let EADS go on too costly an acquisition drive as they seek to exit the business.

But Gallois denied his hands were tied and said the EADS board fully backed the company's acquisition strategy.

EADS was forged from a merger of aerospace assets of France, Germany and Spain in 2000 and also incorporates aircraft wing manufacturing based in Britain. Its first decade was marked by bitter in-fighting and delays to its A380 superjumbo and A400M.

"We had the turbulence over the A380 and the financial crisis, and now we are in a better position to look at acquisitions in a serene way," Gallois said.