Safran Turns The Corner On Silvercrest Engine

Safran said it has turned the corner on problems in developing an engine for business jets after hefty charges knocked its 2015 operating profit.

The aero engine and equipment maker said operating profit fell 12.5 percent to EUR€1.73 billion (USD$1.9 billion) after EUR€698 million in one-off charges, of which EUR€654 million were related to delays in developing the Silvercrest engine.

Safran said it had reached agreement with Dassault Aviation on extra development work and a new schedule for the engine, confirming this would involve an 18-month delay in certification.

The engine will be flown on a test aircraft at the end of 2016 and certified at the start of 2018, Safran said.

The delays resulted in the loss of one of the engine's two clients, Cessna which switched to Honeywell as engine supplier for its Citation Longitude last year, and delays in development of Dassault's Falcon 5X.

Chief executive Philippe Petitcolin said Safran engineers now understood the causes for the delays and were 95 to 98 percent sure their proposed solutions would work.

They also have a "plan B" in case these efforts do not go far enough, Petitcolin told reporters. "There is absolutely no problem today. We took the delay, we are correcting it, and have the solutions for that," he said.

Safran said development of the LEAP engine for Airbus and Boeing narrow-body jets, carried out jointly with General Electric through their CFM International venture, was on track and on time.

Revenue rose 13.4 percent to EUR€17.41 billion. Widely watched civil aftermarket revenue grew 18.9 percent in dollar terms.

On a recurring basis, operating profit rose 16.4 percent to EUR€2.43 billion.

Safran predicted this would rise around 5 percent on revenue growing in the "low single digits" in 2016.

Petitcolin declined comment on a report that it planned to sell its Morpho Detection airport screening business.