Commercial aero and auto growth boosts GKN profits

Reuters

LONDON, Oct 22 (Reuters) - Car and plane parts maker GKN posted a 34 percent rise in third quarter profit asstrong growth at its automotive and commercial aerospace unitsmade up for sluggish demand in military and industrial markets.

The British firm on Tuesday reported a pretax profit of 131million pounds ($211.68 million) in the three months to the endof September on sales 16 percent higher at 1.87 billion pounds.

GKN, a major supplier to planemakers Airbus andBoeing and carmakers such as Volkswagen, saidits trading margin rose to 8.2 percent during the period, upfrom 7 percent in the same quarter a year ago.

"The third quarter showed good progress, supported byautomotive demand in China and North America and sustained highoutput levels in commercial aerospace," said GKN's ChiefExecutive Nigel Stein, adding that last year's purchase ofVolvo's aero engine unit also helped boost profits.

The company expects auto and commercial aerospace markets toremain robust for the foreseeable future but sees softnesscontinuing in industrial and military markets.

Global light vehicle production increased 4 percent in thethird quarter of the year, with especially strong growth inChina and North America, and Europe and Japan improvingslightly.

Global airlines will buy more than $3.5 trillion of aircraftover the next 20 years to meet demand for travel to and fromemerging markets and renew ageing fleets in the West, accordingto the world's big two planemakers, helping suppliers such asGKN, which makes parts for the Boeing Dreamliner and theupcoming Airbus A350 XWB.

Shares in GKN, which have risen 9 percent in the last threemonths, closed at 362.5 pence on Monday, valuing the group ataround 6 billion pounds.

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