Leonardo bullish on continued growth in civil helicopter deliveries

Leonardo has released its financial results for 2018, where it appears helicopter deliveries have increased significantly and the division made a key contribution to the parent company’s improved performance.

Leonardo's AW169, AW139, and AW189 have been key in growing the OEM's share of the civil helicopter market. Leonardo Photo
Leonardo’s AW169, AW139, and AW189 have been key in growing the OEM’s share of the civil helicopter market. Leonardo Photo
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The OEM grew its share of the global civil helicopter market in terms of the value of deliveries, which it mainly attributed to growth in the medium segment, from 3.2 to 10 metric tons — namely, the AW169, AW139 and AW189.

Deliveries of military and civil helicopters reached 177 units, up from 149 in 2017. The helicopter division’s revenues amounted to €3.8 billion ($4.3 billion), an 11 percent improvement. The company emphasizes AW139 and AW101 deliveries drove revenues.

The division met its key targets, according to a Leonardo statement. Orders increased by 97 percent in value, at €6.2 billion ($7 billion). The backlog, as of December 31, 2018, stood at €12 billion ($13 billion).

Profitability reached 9.4 percent (up from 8.3 percent) and is envisaged at a double-digit level in 2020. Ongoing actions include “streamlining and optimizing industrial processes and the gradual implementation of projects aimed at improving competitiveness of the main products.”

The civil market has slightly recovered, having grown by four percent last year, the company estimates. In missions, emergency medical services (EMS) and VIP “experienced the highest positive momentum.” Major contracts signed in 2018 included 15 AW139s for China-based SINO-US, representing more than €150 million ($170 million). In Saudi Arabia, Leonardo sold 21 AW139s to Saudi Aramco, to be delivered over the 2018-2020 period for offshore and search-and-rescue operations.

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Military contracts accounted for much greater amounts. Qatar ordered 28 NH90s for over €3 billion ($3.4 billion) and Leonardo has a 32 percent share in the NH Industries consortium. The U.S. Air Force’s contract for MH-139s, to replace the UH-1N fleet, is estimated at $1.4 billion. The Italian government has ordered 22 AW169Ms for €280 million ($316 million) and training, spare parts and options will add an expected €100 million ($113 million).

For the coming years, Leonardo expects an average five percent annual growth in civil helicopter demand. It would thus attain $4.3 billion in 2023. The U.S. and the E.U. will remain the most important markets, company officials believe. The 3.2 to 10 metric ton category, which the AW169, AW139 and AW189 belong to, is forecast to grow even faster, by an annual six percent.

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