May 22, 2019 / 7:07 AM / 4 months ago

UPDATE 1-FACC delays sales target due to weaker aircraft demand

(Adds Croatian investment project, CEO, shares)

VIENNA, May 22 (Reuters) - Plane parts maker FACC has pushed back its 1 billion euro ($1.1 billion) sales target by a year to 2020/21 as it expects demand for some new aircraft will be weaker than initially thought, sending its shares down 6.4% on Wednesday.

The Chinese-owned group makes components for wings, tail assemblies and fuselages as well as engines and cabin interiors for planemakers including Airbus, Boeing and Bombardier.

Profit margins in the first half of the 2019/20 financial year will be lower than in the previous year due to the introduction of new projects, the group, owned by Aviation Industry Corporation (AVIC), said.

One of the new projects is a 33 million euros investment in Croatia, where FACC plans to build an automated digitized production complex that is expected to start production in 2021.

Austrian-headquartered FACC said it expected sales this financial year to grow in line with the market, and that the discontinuation of Airbus’s A380 aircraft programme would be compensated by other orders.

FACC said it aimed to keep profits around the level of the 2018/19 financial year, when reported earnings before interest and tax (EBIT) were 43.6 million euros.

“We are doing everything in our power to achieve fixed cost degression through targeted operational measures and to further increase profitability - with the aim of compensating for natural cost increases,” said Chief Executive Robert Machtlinger.

The order backlog stood at $6.5 billion at the end of February.

$1 = 0.8969 euros Reporting by Kirsti Knolle; Editing by Thomas Seythal and Mark Potter

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