SPIRIT Aerosystems' Belfast operation lost $227 million (£185m) last year, bringing its total pre-tax losses since 2019 to almost three quarters of a billion dollars (US), new accounts show.
Short Brothers PLC, which was acquired from Bombardier by Kansas-based aerospace giant Spirit in 2019, has not been profitable since 2016, banking $850m (£692m) in pre-tax losses in the six years to 2022.
The latest accounts for the Northern Ireland business, which makes aerospace components, including wings for the Airbus A220 aircraft, show its revenues recovered to $697.3m (£568m) in the year to December 31 2022.
That was around $100m more than a year earlier, but it was still around $200m below its pre-Covid performance of $890.3m.
The operation, which employed 3,075 people in 2022, has been devastated by what it called “uncontrollable challenges”, including the Covid-19 pandemic, inflation and the war in Ukraine.
“The business continues to face challenging cost pressures in a difficult overall aerospace context,” said the company.
“In addition to the continues recovery from the Covid-19 pandemic, the business encountered increased production rate pressures from; supply chain shortages, the highest levels of inflation in more than 40 years, and the Russian invasion of Ukraine.”
Sanctions imposed on Russia directly resulted in the Belfast-based company recognising contract exit costs of more than $70m (£57m) in 2022.
The company also took a $35m (£28.5m) loss after agreeing a settlement with a key supplier to ensure continuity of supply, and took a $23m (£19m) loss from what it called “onerous contract provisions”.
In all, Spirit Aerosystem banked $130m (£106m) in exceptional costs in 2022.
“The remainder of the loss can be attributed to operational performance of $16.5m, other operating costs of $43.5m , interest and finance costs of $36.8m and tax of $656,000,” said the company.
Spirit also acknowledged that its 2021 accounts had benefited from a $60.5m (£49m) gain from the closing of the Short Brothers Pension Schemes to future accrual.
Despite the eye-watering losses, the directors of the Northern Ireland business said the recovery of the aviation industry in 2022 saw improved commercial deliveries of 424, which was in line with the group’s post-pandemic recovery plan.
Spirit said the improved revenue in 2022 was driven by a ramp up on A220 wing deliveries and an increase in fuselage deliveries, both of which accounted for around half a billion dollars in revenue.
The US –owned aerospace group also confirmed it completed the early repayment of a UK Government loan it inherited from the previous owner.
Bombardier received £180m as part of an aid packaged in 2005 linked to the production of the C-Series aircraft, later sold to Airbus and rebranded as the A220.
The 2022 accounts state: “In a strategic cash governance and liquidity decision, the company settled early in 2022 for $318m a repayable investment agreement with the UK Government.”
Looking ahead, Spirit said its Northern Ireland operation is now focusing on the space and defence sector to leverage new business.
The accounts reveal the loss-making operation in Belfast continues to be funded through a $300m (£244m) credit facility with Spirit Aerosystems (Europe), which was extended to $500m (£407m) in February 2023.
The amount drawn down by the company as of December 31 2022 was $315.5m (£257m).
