NAV CANADA announces first quarter financial results
Jan. 10, 2008, Ottawa – NAV CANADA today released its financial results for the three months ended Nov. 30, 2007.
January 10, 2008 By Carey Fredericks
Jan. 10, 2008, Ottawa – NAV CANADA today released its financial results for the three months ended Nov. 30, 2007. Growth in air traffic and favourable cost variances from plan contributed to an improvement in the Company’s financial position during the first quarter of its 2008 fiscal year.
“The first quarter was positive for our customers as they continued to benefit from the service charge reduction,” said John Crichton, NAV CANADA President & CEO.
NAV CANADA implemented a service charge reduction of 4 per cent on August 1, 2007 with 1 per cent of it temporary until August 31, 2008. The reduction will save customers approximately $ 50 million in fiscal 2008. The Company expects to achieve breakeven financial results in 2008, consistent with our mandate.
The Company’s revenues before rate stabilization and the approved transfer from the rate reduction obligation for the first quarter of fiscal 2008 were $ 300 million, compared to $ 299 million for the comparable period in previous year. The higher revenues arose primarily from a 5.3 per cent year-over-year increase in air traffic volumes, partially offset by the 4 per cent reduction in customer service charges.
Operating expenses before rate stabilization for the quarter were $ 234 million which was $ 2 million higher than last year. This increase was primarily due to higher compensation levels partially offset by lower pension costs.
During the first quarter, other expenses totalling $ 61 million were $ 6 million higher than in the prior year. This was primarily due to lower investment income and the depreciation of new capital assets.
The foregoing resulted in an excess of revenues over expenses of $ 5 million in the first quarter of fiscal 2008. While NAV CANADA intends to break even on an annual basis, quarterly results may indicate an imbalance between revenues and expenses due to seasonal fluctuations in air traffic and other factors. In order to achieve planned results, the Company recorded a $ 5 million improvement in the rate stabilization account and a $ 3 million transfer from the rate reduction obligation. During the first quarter of fiscal 2008, the Company’s rate stabilization account increased to $ 66 million.
The Company’s financial statements and Management's Discussion and Analysis for the three months ended November 30, 2007 are available on NAV CANADA’s website at: www.navcanada.ca .