FACC records notable revenue growth, scheduled earnings improvement for second quarter

FACC (Ried im Innkreis, Austria) reports that its positive market development continued into the second quarter of 2022. With a 12.5% increase in revenue compared to the first half of 2021, management’s market estimates have been confirmed. In spite of the challenging global environment EBIT doubled relative to the previous year as well.

Owing to the positive development of the aviation industry, the demand for new and more efficient aircraft is again increasing significantly, FACC reports. Moreover, the company anticipates a continuous increase in demand — with orders for around 13,000 aircraft from all major manufacturers as well as a large order from Archer Aviation (Santa Clara, Calif., U.S.), all signs are pointing to growth. Inauguration of its new plant in Croatia will further enable FACC to meet future higher demand. Since the beginning of the year, 200 new members of staff have been hired throughout the group, and the workforce will be increased by another 500 employees in the next 12-18 months.

The military conflict between Russia and Ukraine has had no direct impact on FACC. The company says it does not procure materials or services from either of the two countries, and prior to the imposition of sanctions against Russia, product sales with Russian aircraft were low, at around €1 million per year. The supply of FACC components to Russian customers has now been suspended.

Back in March 2022, shortly after the outbreak of the conflict, investments were initiated to become completely independent of natural gas supplies, enabling manufacturing operations without the use of natural gas in the coming months. Overall, fossil fuels account for 18% of FACC’s energy mix. As the company has been committed to sustainable energy management for years, the use of geothermal energy and green electricity has become a key strategic advantage for FACC. By 2040, the company says its entire production will be CO₂-neutral.

In spite of the challenging global environment, the outlook for the second half of 2022 remains unchanged given the current order situation. For the full year, management expects revenue growth of approximately 10% and a tripling of operating EBIT compared to the previous year. This forecast is supported by the positive development in aviation:

• Short- and medium-haul air traffic volumes are expected to return to the levels of 2019 in 2023.
• Intercontinental air traffic is also recovering as forecast.
• The development of aircraft construction rates for the Airbus A320 is satisfactory. Over the next 18 months, demand is set to increase by a further 20%, with FACC benefiting strongly from this development, as 30% of FACC’s sales are generated with this aircraft.
• Another favorable development is completion of the flight test program of the Chinese C919 medium-haul aircraft with a capacity of up to 150 passengers. C919 type certification, and thus also the start of series production, will take place by the end of the year. For the C919, FACC is supplying the entire passenger cabin as well as wing components and fuel-saving winglets.