Airbus, Almonty, thyssenkrupp: Market impacts and investment opportunities in focus

Airbus lowers financial targets for 2024: Supply chain problems and aerospace costs are a burden

Airbus SE warns its aircraft customers of possible delivery delays over the next two years. This is a sign of ongoing supply chain issues that could last even longer than the announced period.

Airbus informed its customers that planned deliveries for 2025 and 2026 are at risk of meeting corresponding contract deadlines. Deliveries could be delayed by several months as Airbus continues to face shortages of components such as engines, structural parts, and cabin interiors. The Company has also postponed the increase in production rates for the A320 model by one year, limiting availability for customers seeking an upgrade. CEO Guillaume Faury expresses concern about specific supply chain challenges exacerbated by geopolitical tensions. Airbus forecasts lower profits and cash flows this year due to charges in the space division.

Aircraft buyers will have to use older models for longer due to delayed deliveries, resulting in higher costs due to additional maintenance and fuel consumption. The security risk for smooth air traffic is also increasing. Airbus shares fell on Tuesday after the Company announced it was lowering its financial targets for 2024. Airbus stated that it now expects lower earnings before interest and taxes. The Company cited supply chain issues and additional costs in its Space Systems division as reasons for the lowered targets.

Almonty Industries ensures uninterrupted supply chains through conflict-free tungsten mining areas

With geopolitical tensions rising, demand for advanced defense technologies is expected to increase, which in turn will increase demand for the metal tungsten. Tungsten is one of the hardest metals and is used in both aerospace and military components.

With the world's longest active mine in Panasqueira, Portugal, and the world's largest tungsten deposit under construction in Sangdong, South Korea, Almonty is poised to become the most important global supplier of conflict-free tungsten material. The dramatic consequences of supply chain failures or delays are made abundantly clear by the case of Airbus. The Canadian company Almonty specializes in tungsten mining, and its sites all have something in common: they are all located in democratically governed countries such as Portugal, Spain, and South Korea.** In the event of an intensified global conflict, customers of the coveted metal are in good hands with Almonty.

Tungsten recovery rates at the Panasqueira poly-metallic tungsten deposit improved in the first quarter of 2024 and are now in line with the expected average recovery rates for the life of the mine. Mined grades, including by-product metals such as copper and tin, also improved and are expected to approach the long-term average of 0.185% over the remaining operating life of more than 30 years. The opening of the mine's Level 4 (L4) could significantly increase production capacity by the end of the year.

Sphene Capital analysts remain positive on Almonty Industries' shares using a two-stage discounted cash flow model that takes into account the current and future production assets (Sangdong, Panasqueira, and Los Santos) as well as the development-related value of the Valtreixal project. The price target is set at CAD 2.13 per share. With an expected share price performance of 222.7%, the "Buy" recommendation for the shares of Almonty Industries is confirmed.

thyssenkrupp Steel faces radical change: Takeover plans shake employees

Steel is needed more than ever in times of rearmament. Tungsten demand is also rising as the metal is mixed with steel to harden it. The German steel giant thyssenkrupp is currently in the crosshairs of German trade unions: thyssenkrupp Steel Europe is planning a significant reduction in jobs and capacity, which has triggered concerns among the approximately 27,000 employees about forced redundancies. Czech billionaire Daniel Křetínský aims to acquire a 20% stake in the Company and has set the ball rolling on the redundancies.

The aim is to make thyssenkrupp Steel fit for the future in the face of persistently challenging market conditions. Job cuts are part of this. The core of the realignment involves reducing installed production capacity to around 9 to 9.5 million tons p.a., which corresponds to the level of the last three years. The current production capacity is around 11.5 million tons. The 11.5 million tons also include the steel produced by the Duisburg-based company HKM, in which thyssenkrupp Steel holds a 50% stake.

As was only announced this week, the restructuring of thyssenkrupp's steel division will take place without compulsory redundancies. This fulfills a central demand of the trade unions, which had recently strongly criticized the current management. An IG Metall union spokesperson emphasizes that the agreement is a positive foundation but only the beginning of negotiations. The goal now is to draw up legal contracts and clarify questions regarding financing and strategy. Jobs are guaranteed until the end of March 2026.

The Czech billionaire has a net worth of USD 9.2 billion. Křetínský manages and owns Energetický a průmyslový holding (EPH), the largest energy group in Central Europe. EPH employs more than 25,000 people, sells electricity and offers gas storage and transmission. During the 2020 market crash, Křetínský attracted attention by investing in companies such as Macy's, Foot Locker, Sainsbury, and Royal Mail. He also holds shares in the French newspaper Le Monde and the German retail giant Metro AG. **Křetínský is 48 years old, comes from Brno and has a degree in law. Brno is the second largest city in the Czech Republic after Prague. Křetínský is known for investing in undervalued companies.

Airbus has lowered its financial targets for 2024 due to ongoing supply chain problems and additional costs in the aerospace division. Despite the current issues and cost pressures, Airbus is one of the world's leading commercial aircraft manufacturers with an extensive order pipeline. However, production is delayed, which is often a red flag for investment. Almonty Industries could play a key role in securing uninterrupted supply chains through its tungsten mines in conflict-free countries such as Portugal, Spain and South Korea. Given the increasing demand for tungsten, particularly in the defense industry, Almonty is well-positioned to benefit from this growth. Potential investors may consider the long-term strategic importance of tungsten as a raw material and Almonty's market position. thyssenkrupp is facing extensive restructuring in its steel division, triggered, among other things, by the entry of Czech billionaire Daniel Křetínský, who wants to acquire 20% of the Company. While the restructuring is necessary to strengthen competitiveness, there is a risk of ongoing social unrest and legal challenges for investors. Overall, both Almonty and thyssenkrupp could be exciting investment candidates for portfolio diversification.