Aerospace technology company, FACC AG, has reported its revenues down by 26 per cent in the second quarter of 2020 as a response to the Covid-19 pandemic.
It said that it was unable to withstand the global impact of the corona crisis as 80 per cent of aircraft fleets worldwide were grounded for months, take-overs of new aircraft were postponed, and “hardly any” new orders were placed. This resulted in necessary adjustments of the production rates of the main customers to the new market conditions and, as a consequence, a reduced sales volume for FACC.
Revenues in the first half of 2020 amounted to €292.1 million a decline of 26 per cent from the €394.9 million in 2019.
FACC AG CEO, Robert Machtlinger, said: “The corona pandemic is taking its toll on the entire global economy. In this phase, we are focusing on three major goals: With our task force, we have been working consistently since February to protect the health of our employees as best as possible.
“At the same time, we want to support and accompany our customers with consistent delivery reliability – and we have succeeded in doing so completely during the pandemic. At the same time, we have set up a solid plan for the future in these dynamic times and thus ensure the stability of the company.
“The Corona aid packages made available by the Austrian Federal Government were also helpful in overcoming the crisis in recent months and have provided the company and the entire workforce with very good support in overcoming the crisis in the short term.”
Since 30 March 2020, FACC has been implementing the short-time working model for its entire workforce in Austria. While capacity utilisation was still close to 100 per cent for many projects in March, it fell to 50 per cent in the following months.
From September onwards, capacity utilisation is expected to rise again to around 70 per cent.
Nevertheless, it has said that the need to streamline the organisation has become necessary. Through vertical integration, i.e. the insourcing of previously outsourced work packages into the FACC organisation, as well as the insourcing of projects currently produced abroad, further job-securing and stabilising measures are being implemented.
Based on the information currently available, the revenue expectation for 2020’s business year is between €500 and €520 million. As regards earnings, management is anticipating EBIT in the range of -55 to -65 million euros. This includes the Covid-19 impact and adjustments of €37 million already outlined in the half-year report as well as costs for the staff reductions announced for the second half of 2020.
For the following years, the company’s management has assumed that the 2021 financial year will remain at the level of 2020. From 2022 onwards, it is expected that renewed growth will occur in line with the market development of the programs essential for FACC and that additionally planned new projects will ensure growth.