France to sell stake in Snecma aero engine maker

24th February 2004, Comments 0 comments

PARIS, Feb 24 (AFP) - France is to sell a "substantial and minority" stake in the jet engine maker Snecma in the coming months if market conditions are favorable, the finance ministry said Tuesday in a statement.

PARIS, Feb 24 (AFP) - France is to sell a "substantial and minority" stake in the jet engine maker Snecma in the coming months if market conditions are favorable, the finance ministry said Tuesday in a statement.

The French state currently owns 97.2 percent of Snecma.

"Prospects for the aeronautic market have improved and Snecma has shown its capacity to resist in a difficult climate," a ministry statement said.

"Snecma is taking part now in a rebound of the sector through the work of its staff, its high technology products, a healthy financial situation and a stable profitability despite the crisis.

"Opening up its capital will give Snecma room to pursue its industrial development."

The company posted net profit Tuesday of  EUR 182 million (USD 229 million) for 2003, an increase of 70 percent from the EUR 106 million booked a year earlier.

Operating profit edged two percent higher to EUR 476 million, and Snecma's operating margin improved to 7.4 percent from 7.2 percent.Sales slipped by one percent to EUR 6.431 billion, while group debt fell to EUR 251 million from 590 million.

Debt now represents 20 percent of shareholders funds, against 51 percent a year ago.

"Aside from exceptional events and on the basis of stable deliveries of civilian engines and a return to normal growth in traffic, Snecma expects stable sales in 2004, maintaining its operating margin and a new increase in net profit," the company said.

The French government had planned to sell 25 percent of Snecma in 2001 but its plan was scuppered by the September 11 attacks on the United States and an ensuing air transport crisis.

Investment banks have put the group's value at between EUR 5 and EUR 6 billion, according to chairman Jean-Paul Bechat.

Snecma is the fourth biggest jet-engine maker in the world, behind General Electric, Pratt and Whitney, and Rolls-Royce.

Aside from the government's holding, 1.7 percent of Snecma is owned by the US group United Technologies Corporation, with employees and small shareholders holding the remainder.

© AFP

                                                              Subject: France news

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