UK’s Meggitt flags could be written from Russian aircraft program

March 3 (Reuters) – British aircraft parts maker Meggitt Plc flagged on Thursday a possible “material” write-down of a Russian aircraft program over the next 12 months amid the Ukraine crisis, after posting a lower annual profit due to supply disruptions.

The company, a component supplier to aircraft manufacturers including Boeing (BA.N) and Airbus (AIR.PA), has tried to mitigate supply chain disruptions, cut lead times and seek alternatives for electronic parts due to pandemic hurdles.

“As we look to the future, and even though the civil aerospace recovery is expected to remain uneven in the short term, the long-term outlook and fundamentals of our civil aerospace business remain positive,” said Chief Executive Tony Wood.

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Meggitt is one of the suppliers of the MC-21 aircraft development program of the Russian company Irkut (IRKT.MM), which is due to enter service this year. Irkut’s parent company, United Aircraft Corporation, is majority-owned by Rostec, the Russian aerospace and defense conglomerate.

Senior Plc, which supplies cabin air circulation systems for the MC-21, also said earlier this week that the Ukraine-Russia crisis could affect sales of that program.

Another British aerospace supplier, Melrose, said separately on Thursday it was reviewing the timing of its returns to shareholders as global markets reeled from the impact of Russia’s invasion of Ukraine.

Meggitt said underlying operating profit was 177.3 million pounds ($237.62 million) for the year ending December 31, compared with 190.5 million pounds a year earlier.

Meggitt, which also supplies wheel and brake systems for military fighter programmes, said its £6.3bn deal with US counterpart Parker-Hannifin (PH.N) is close to completion. in the third quarter of this year.

Parker-Hannifin’s takeover of the company is still under regulatory scrutiny, with Britain reviewing the deal on national security grounds.

($1 = 0.7462 pounds)

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Reporting by Yadarisa Shabong and Shanima A in Bengaluru; Editing by Rashmi Aich

Our standards: The Thomson Reuters Trust Principles.

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