Leonardo, here’s how the former Finmeccanica points to both China and the US
Leonardo towards an agreement for the supply of parts of the fuselage of a long-range aircraft in China for the Pomigliano d'Arco plant. Meanwhile, news also for the US subsidiary Drs.
Leonardo points to China to relaunch the Aerostructures division.
As reported on Sunday in the morning "from a meeting of the Council of Ministers, the ok for a Leonardo operation aimed at participating in a contract with the Chinese manufacturer Commercial Aircraft Corporation of China (Comac)".
“The skills of Leonardo's Aerostructures division have been recognized. For the Pomigliano plant it represents the possibility of refocusing on a new project that will restore confidence, especially in a phase that still sees some difficulties ”, added the Campania daily.
“The operation has yet to be defined, but the conditions for a positive outcome seem to exist”, underlines il Mattino .
In the meantime, positive news also arrives from the other side of the Atlantic for the company led by Alessandro Profumo.
On Friday Leonardo Drs, the US subsidiary of the group, was awarded a US Air Force contract for the supply of electronic warfare systems. The five-year contract is worth $ 950 million.
But the good news from the United States and China does not ignite the Leonardo stock floating in Piazza Affari (+ 0.06% to € 6.59), MF notes .
“The news of the contract with the US Air Force is clearly positive and not obvious. The one on the possible contract with Comac reminds us of a previous memorandum of understanding signed in 2018 by Leonardo with the Chinese Kangde Investment Group, within the framework of the Comac CR929 long-range airliners program. The 2018 memorandum of understanding did not translate into anything concrete. However, we believe the two news are positive and not discounted and we confirm the buy rating and the target price on the stock at 9.25 euros ”, highlighted Banca Akros, reports MF .
Here are all the details on the latest news for Leonardo between China and the United States.
THE OPERATION WITH COMAC
The agreement with the Chinese manufacturer Commercial Aircraft Corporation of China (Comac) provides for the supply of fuselage sections of a long range widebody aircraft.
THE VALUE OF THE OPERATION
The total value of the operation for Leonardo is around 2 billion euros.
I WORK FOR THE POMIGLIANO D'ARCO SITE
Specifically, the plant of Leonardo's Aerostructures division in Pomigliano d'Arco would be responsible for the production of fuselage sections.
As recalled by Il Mattino , about 2500 workers are employed in Pomigliano, including 1650 in the Aerostructures division.
POSITIVE NEWS FOR TRADE UNIONS …
“The trade unions, which in recent months had expressed concern about the few investments, underlining the need for a relaunch, consider the operation positively. "It is an important opportunity" explains Bruno Cantonetti, national secretary and head of the Aerospace sector to Mattino .
We remind you that the company led by Profumo announced at the beginning of the month that it will use the Cigo layoffs for employees of the Aerostructures division.
In fact, Leonardo confirmed its intention to cover job vacancies in 2022 with the use of the Cigo as a social safety net .
Specifically, the use of social safety nets should not be necessary for the Pomigliano and Nola plants in 2023, a partial use could be used in the first half of the same year on the Foggia plant. The situation is more delicate for the Grottaglie plant: here the use of social safety nets is foreseen for the years 2023 and 2024.
… LESS FOR ANALYSTS
The “possible contract with Comac reminds us of a previous memorandum of understanding signed in 2018 by Leonardo with the Chinese company, Kangde Investment Group, within the framework of the Comac CR929 long-range airliners program. The memorandum of understanding of 2018 did not translate into anything concrete ”, underlined Banca Akros, taken up by Mf .
LEONARDO'S 2018 MEMORANDUM WITH GROUP IN CHINA
Also in October but in 2018, Leonardo announced that it had signed a framework agreement with the Chinese Kangde Investment Group to join the project for a new wide-body jet, a move aimed at increasing the presence of the Italian aerospace group in Asia. .
The agreement involved the establishment of a joint venture – Kangde Marco Polo Aerostructures Jiangsu – responsible for the development, production and assembly of components for the CR929 aircraft.
The Commercial Aircraft Corporation of China (Comac) and the United Aircraft Corporation (UAC) of Russia had thought about launching the long-range aircraft program the previous year.
WHAT JOHN MILLS HAD WRITTEN ABOUT EPOCH TIMES
That partnership had not met the approval of some US commentators.
So much so that this year Edward Luttwak, an American political scientist, had relaunched the content of an analysis by retired Colonel John Mills published in the Epoch Times.
"On October 26, 2018, China, through the Commercial Aircraft Corporation of China (Comac), signed an agreement with Leonardo (owner of Alenia) for the development of the CR929, essentially the Chinese equivalent of the Boeing 737", Mills pointed out. , adding that Comac "has in turn started a joint venture with the United Aircraft Corporation (Uac) of the Russian Federation"
"As part of the civil-military fusion program, the CCP is used to constantly creating new or slightly different companies, so Comac / Uac's link with Leonardo / Alenia, which also produces part of the Boeing 787, should be considered a danger. for Boeing's intellectual property ”, the American colonel had branded the agreement with Comac.
THE CONTRACT ON THE MILITARY FRONT FOR DRS
But Leonardo does not look only to China.
Last Friday, the American subsidiary Drs announced the award of a contract from the US Air Force for the supply of electronic warfare systems. “The contract is worth $ 950 million and will be spread over 5 years (approximately 7% of annual turnover). In 2020, Drs reported order intake of 3.1 billion (1.43 billion in the first half of this year). The contract represents 6% of Leonardo's estimated orders for 2021 (14 billion) ”recalled MF .
THE COMMENT OF THE ANALYSTS
"We believe that this contract was part of the soft backlog of Drs, programs for which the group is the sole supplier or has a high probability of signing, which in the last presentations was indicated above 10 billion dollars without indicating the timing for the transformation into order. ”, Underlined today Equita Sim (rating buy and target price at 8.8 euro confirmed on the share) taken up by MF , according to which this contract could help the listing of Drs.
“This is also positive news for Bestinver Securities for Leonardo which adds greater visibility to Drs orders (the contract weighs about 29% on the broker's estimate of 2021 orders)”, adds MF . “We expect Drs to continue to be one of the group's main growth drivers in the future, thanks to a positive US market environment and the expected increase in market share. We recall that Drs accounted for about 24% of Leonardo's 2020 turnover ”, concluded Bestinver, confirming the buy rating and the target price of between 7 and 8 euros on the share.
AT WHAT POINT IS THE LISTING OF THE US SUBSIDIARY
So the dossier on the IPO by Drs is still at stake.
Earlier this month, Reuters revealed that the Piazza Monte Grappa company plans to list its subsidiary Drs on Wall Street next fall. The Italian aerospace and defense giant would sell about 20% of DRS, which has the United States Pentagon among its main customers.
The IPO project suspended in March envisaged the placement of 22-25% of Drs for a total income between 730 and 800 million for the parent company which would have kept between 75% and 78% of the American group in the defense sector.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/leonardo-ecco-come-lex-finmeccanica-punta-sia-alla-cina-sia-agli-usa/ on Mon, 25 Oct 2021 13:28:43 +0000.