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Discovery’s Q2 revenue grows, profit declines

Sept. 11, 2012, Yellowknife, N.W.T. - Discovery Air Inc. continued to operate profitably in the second quarter but the cost of its growth initiatives also weighed on the company's bottom line.


September 11, 2012
By Carey Fredericks

Sept. 11, 2012, Yellowknife, N.W.T. – Discovery Air Inc. continued to
operate profitably in the second quarter but the cost of its growth
initiatives also weighed on the company's bottom line.

Discovery reported Tuesday that its second-quarter profit fell to $8.9 million or 38 cents per share on a diluted basis, down from $17.98 million or 96 cents per diluted share in the year-earlier period.

The company, which primarily provides air transportation services to remote areas, says the profit fell due to the significant
investments it has made to grow.

Discovery's second-quarter revenue rose to $74.2 million from $70.6 million a year earlier.

Brian Semkowski, Discovery's interim president and chief executive, said the company has acquired two helicopter operations,
put three commercial jets into service for a new charter operation and acquired seven aircraft so far this year.

"The acquisition, certification and operating costs associated with these recent additions in a relatively short span of time
caused our expenses to grow at a faster rate than our revenues,'' Semkowski said in a statement.

"Our earnings were also negatively impacted by increased expenses in our technical services operation and lower demand for
contracted airborne training services in the quarter. We are committed to generating strong returns from our investments and
expect our earnings to improve as our technical services business matures and we increase the utilization of our newly acquired aircraft.''

Semkowski was appointed interim president and CEO in June, replacing David Jennings who had held the post since 2008. Jennings remains a director of the company.

The June 20 announcement came less than a week after Discovery reported that it had returned to the black in the first quarter of fiscal 2013, which also recorded a 42 per cent increase in revenue – rising to $52.9 million from $37.2 million.

Discovery, with some 850 employees and more than 150 helicopters and fixed-wing aircraft, provides airborne training to the Canadian military as well as airborne fire services, air charter services and logistics support along with a range of maintenance, engineering and certification services.