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Airbus reports 2024 earnings in line with market forecasts

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Delays A350 freighter by about a year to H2 2027

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Takes new Space charge of 300 million euros

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Highlights risks on A400M military aircraft amid weak

orders

(Adds CEO quote, analysts' comments in paragraphs 7-9, share

move in last paragraph)

By Gianluca Lo Nostro and Tim Hepher

Feb 20 (Reuters) - Airbus flagged short-term

production pressures and confirmed a delay to its A350 freighter

as it predicted a 7% increase in deliveries to around 820 jets

this year, while continuing to clean up troubled space and

defence projects.

Europe's largest aerospace group took a fresh charge of 300

million euros ($312.84 million) for its troubled Space business,

while highlighting potential risks to the long-term future of

its slow-selling A400M military transport aircraft.

Airbus reported adjusted operating income of 5.35 billion

euros for 2024, down 8% and in line with expectations, including

2.56 billion in the fourth quarter as it grappled with ongoing

snags in its supply chains.

Annual revenue rose 6% to 69.23 billion euros, of which

24.72 billion was generated in the three months to December 31.

Analysts had on average expected fourth-quarter core

operating profit of 2.6 billion euros on sales of 24.68 billion,

according to a company-compiled consensus survey.

Airbus' shares were down around 3% in early trading, after

hitting record-highs a day earlier, with analysts pointing to

the slightly weaker than expected EBIT burdened by space

charges.

The planemaker, which delivered 766 jets last year,

roughly in line with its target, has been facing industrial

delays due partly to problems in the aerospace supply chain,

which have also hampered the recovery of embattled U.S. rival

Boeing ( BA ).

"Specific supply chain challenges, notably with Spirit

AeroSystems ( SPR ), are currently putting pressure on the ramp

up of both the A350 and the A220," Airbus CEO Guillaume Faury

told analysts during an earnings call.

The planemaker maintained all its medium-term output

targets, however.

"Confidence in the future production rates for commercial

programmes should be incrementally higher," RBC analysts said.

Airbus said it was delaying a new freighter version of its

A350 wide-body jet by around a year to the second half of 2027,

confirming a development delay previously reported by Reuters.

For 2025, Airbus forecast adjusted operating income to rise

to about 7 billion euros, excluding any impact from threatened

trade tariffs but including the integration of Spirit, in a sign

that a final deal to absorb Airbus-related factories is close.

The France-based group is expected to take over two Spirit

plants providing composite structural parts for the A350 and

A220. It may also take over a smaller plant in Scotland if no

alternative buyer can be found.

Airbus said the transaction would have a "broadly neutral"

impact at the operating income level and weigh on free cashflow

to the tune of "mid triple digit" millions of euros.

Airbus reported 4.46 billion euros of free cashflow in 2024

and forecast around 4.5 billion in 2025.

The company declared a 2 euro per share annual dividend, up

11% from the prior year, and said it planned to pay a 1 euro a

share special dividend in 2025, on par with 2024.

SPACE AND DEFENCE

In Space, the latest charge brings to almost 2 billion

euros the amount provisioned in two years on loss-making

satellite projects, which industry sources have linked mainly to

the OneSat programme of reprogrammable satellites.

Such losses have spurred talks to create a new venture

grouping Airbus satellite activities with those of Thales Alenia

Space to counter the runaway growth of Elon

Musk's Starlink, though sources caution this may take some time.

Airbus also announced new charges of 121 million euros

for the A400M, which has been hit by chronic delays, partial

order cancellations by European launch nations and slow exports.

Airbus said it was assessing the potential impact of the

uncertainty over orders on future manufacturing levels.

Powered by the West's largest turboprop engines, the A400M

was commissioned in 2003 to give Europe an independent airlift

capacity, rather than relying on the U.S.-built Lockheed Martin

C-130 or the now out-of-production Boeing C-17.

Industry sources say Airbus has enough orders to keep A400M

assembly ticking over for about three years, but that time is

running out for the European army plane barring a surge of new

orders or reversals of budget cuts as Europe reviews defence

spending under pressure from U.S. President Donald Trump.

($1 = 0.9590 euros)