British engineering group Senior has revealed the fallout from Boeing’s 737 Max production cut on its profits for the first half, but remained confident of achieving its annual targets.
The company, which provides components to aeroplane makers, said its revenue and margins had been hit by Boeing’s decision to reduce the number of 737 Max aircraft from 52 per month to 42, instead of a planned increase to 57.
The cutback followed the Lion Air and Ethiopian Airlines fatal plane crashes in October 2018 and March this year respectively.
Revenue was up 11% to £580.4 million in the six months to the end of June as the group offset the 737 Max impact with stronger sales on other civil and military programmes.
However, pre-tax profits dropped 16% to £26.5 million.
Operating margin decreased by 30 basis points to 8%, with a decrease in the aerospace division thanks to the Boeing cutback and other costs including the start-up of a new facility in Malaysia.
But the company said it was on track to report an annual performance in line with expectations.
Chief executive David Squires said: “Trading at the group level in the first half of 2019 has been in line with expectations.
“Notwithstanding the reported 737 Max production rate cuts and the ongoing uncertainty around the current geopolitical and macro-economic backdrop, overall the board expects to meet current expectations for 2019.”