Monday, December 8, 2008
BBD Continues Solid Results
Earnings before financing income, financing expense and income taxes (EBIT) grew by $C114 million to $C315 million, compared to an EBIT of $C201 million last fiscal year ($C269 million before an excess-over-average production cost (EOAPC) charge last fiscal year). EBIT margin reached 6.9 percent compared to last year’s 4.8 percent (6.4 percent before EOAPC charge).
“We have delivered solid results again this quarter with increased revenues, EBIT and net income, generating a $C0.14 earnings per share this quarter, compared to $C0.05 last year,” said Pierre Beaudoin, president and chief executive officer. “During the quarter, Bombardier Aerospace continued to improve its EBIT margin, underscoring the focus on execution. Bombardier Transportation increased its revenues and EBIT margin and received a good level of new orders at $C2.8 billion for a book-to-bill ratio of 1.2. In order to meet their customers’ needs, both groups continued to invest in new products and technologies to further expand their portfolios.
“Although it is too early to assess the severity and duration of the economic slowdown and its potential impact on both businesses, we are confident in our future, having taken significant steps in the past few years to strengthen our operations and financial position,” he continued. “We have a backlog totaling $C51.9 billion – representing an average of 2.7 years of revenue – spread across all businesses and geographies. We have no significant long-term debt maturing before fiscal year 2013. We have $C3.3 billion in cash and cash equivalents. Finally, Bombardier Transportation should be less impacted as governments, through public entities, often increase spending on infrastructure projects during economic downturns. We continue to closely monitor the situation.”
Bombardier Aerospace’s revenues totaled $C2.3 billion, compared to $C2.4 billion last fiscal year. EBIT came in at $C199 million, compared to $C122 million for the same period last year. This translates into an EBIT margin of 8.7 percent for the third quarter ended October 31, 2008, compared to 5.2 percent last fiscal year (8.1 percent before EOAPC charge). Bombardier Aerospace’s backlog stood at $C26 billion as at October 31, 2008, compared to $C22.7 billion as at January 31, 2008.
Business aircraft deliveries remained stable at 57 aircraft for the third quarter of both fiscal years 2009 and 2008. The orders in business aircraft totaled 48 aircraft, compared to 112 aircraft for the same period last year. This reflects a recent softening of demand for business aircraft in light of the current worldwide economic environment and the fact that Bombardier Aerospace received a record level of business aircraft orders in fiscal year 2008.
Bombardier Aerospace delivered 22 commercial aircraft during the three-month period ended October 31, 2008, compared to 33 for the same period last fiscal year. The lower number of deliveries is mainly due to some customers requesting deferral of deliveries to the fourth quarter, and the impact on production of the transition from the Q200 and Q300 aircraft to the Q400 turboprop. Order intake totaled 20 aircraft in the third quarter, up from 12 for the same period last fiscal year – and includes 12 orders for the Q400 NextGen turboprop. In addition, subsequent to the quarter, Bombardier Aerospace received an order for eight Q400 NextGen turboprops from Ethiopian Airlines with options for four additional aircraft.
Bombardier Aerospace expects to deliver a slightly higher level of aircraft, in aggregate, this fiscal year, compared to the 361 deliveries last fiscal year.
Aerospace has achieved its previously stated goal to improve its EBIT margin to 8 percent and is committed to continue to improve its financial performance to an EBIT margin of 12 percent by fiscal year 2013, through the effective management of operations and working capital.
Free cash flow amounted to $9 million for the third quarter ended October 31, 2008, compared to $C579 million for the same period last fiscal year. The free cash flow for the third quarter ended October 31, 2008 mainly reflects Bombardier Aerospace’s profitability, partially offset by an increase in inventories. Free cash flow for the corresponding period last fiscal year mainly reflected an increase in advances on aerospace programs and profitability.
For the quarter ended October 31, 2008, Bombardier Aerospace delivered 80 aircraft, compared to 90 for the same period the previous year. The 80 deliveries consisted of 57 business aircraft, 22 commercial aircraft, and one amphibious aircraft (57 business and 33 commercial aircraft for the corresponding period last fiscal year).
Bombardier Aerospace expects a slightly higher level of aircraft deliveries, in aggregate, in fiscal year 2009, compared to the 361 deliveries last fiscal year. This is mainly due to an expected increase in business aircraft deliveries of approximately 10 percent, partially offset by an expected decline in commercial aircraft deliveries of approximately 10 percent. The decrease in commercial aircraft deliveries mainly results from lower turboprop deliveries due to the impact on production of the transition from the smaller Q200 and Q300 turboprops to the larger Q400 aircraft.
Bombardier Aerospace received 68 net orders during the quarter ended October 31, 2008, compared to 124 during the corresponding period the previous year. The 68 net orders comprised 48 business aircraft and 20 commercial aircraft (112 business and 12 commercial aircraft for the corresponding period last fiscal year). Orders for commercial aircraft notably came from France-based Brit Air who converted options for six additional CRJ1000 NextGen jetliners, for a value of approximately $299 million. Porter Airlines of Toronto exercised options to acquire four 70-seat Q400 turboprop airliners for a value of approximately $104 million while Austrian Airlines of Vienna ordered four Q400 NextGen turboprops, including two options, for a value of approximately $179 million if both options are exercised.
Bombardier Aerospace’s firm order backlog reached $C26 billion as at October 31, 2008, compared to $C22.7 billion as at January 31, 2008. The 15 percent increase reflects a strong order intake, mainly in business aircraft.