SAF Safran SA

By Olivia Bugault

Safran SA trades higher on Thursday after reporting first-quarter results late Wednesday and detailing its cost-cutting plan that will help mitigate the effects of the coronavirus crisis on its earnings.

At 0808 GMT, shares in Safran were up 4.40% at EUR91.10.

The French aerospace and defense company reported revenue of 5.38 billion euros ($5.84 billion) for the quarter, down from EUR5.78 billion a year earlier. Revenue declined 8.8% on an organic basis, it said.

Safran's first-quarter results came in line with expectations, Citi said.

The company has also detailed the cost-cutting measures that it is implementing in order to offset the impact of the crisis on its results. Safran is planning to reduce its operating costs by more than 20% this year compared with last year and will cut capital expenditure by roughly 60% compared with 2019, it said. Research-and-development expenses will also be reduced by 30% this year, it said.

"If our analysis of EUR1 billion to EUR1.5 billion permanent cost reduction is correct, this positions Safran very well for the recovery," Citi said. In total, Safran should reduce cost by EUR3 billion but some measures are only temporary, it said.

Safran also indicated that it is targeting neutral to positive free cash flow this year, which should be welcomed by the market as it is the first company in the sector to provide guidance of any kind.

Write to Olivia Bugault at olivia.bugault@wsj.com

(END) Dow Jones Newswires

April 30, 2020 04:24 ET (08:24 GMT)

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