Published - July 31st, 2023 @ 3:04 PM (GMT+2)
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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 Β£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.
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Ending June 30, Senior's adjusted profits reached Β£17.6 million ($22.62 million), doubling from the previous period. Revenue also experienced a 20% growth, amounting to Β£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.
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H2 Sales Prospects:
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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.
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Production Plans by Boeing and Airbus:
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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.
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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.
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Second-Half Booking:
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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.
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Jefferies analysts commented, "Aerospace has advanced, but the well-known supply chain challenges continue to limit near-term growth/EBITA margin recovery potential."
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Conclusion:β
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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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