(Reuters) -Melrose Industries swung to a first-half profit on Thursday, as a recovery in its aerospace division on some air travel resumption and stringent cost cuts helped the British engineering firm make up for a hit from chip shortages.
The firm, which owns jet and car parts supplier GKN (LON:GKN), warned in May choking chip supplies for automakers would hit its growth. The company restructured GKN and cut jobs during the pandemic to save cash and boost margins.
Melrose said adjusted operating profit for the six months ended June 30 came in at 223 million pounds ($307.32 million), compared with a loss of 11 million pounds last year. Revenue rose nearly 6%, with sales improving across divisions.
"We are continuing to see recovery in all our businesses with trading ahead of expectations. Encouragingly, our aerospace business is now weighted towards the expected narrowbody recovery," Chairman Justin Dowley said, referring to a type of smaller aircraft.
Melrose, which specialises in acquiring and turning around underperforming businesses before selling them, said while the semiconductor crisis is continuing, a shift to electric vehicles has boosted its automotive unit.
The London-listed company said it would pay an interim dividend of 0.75 pence after skipping payouts last year.
($1 = 0.7256 pounds)