NAV CANADA announces Q2 results: air traffic growing steadily
Ottawa - NAV CANADA has released its financial results for the three and six months ended February 28, 2015. During the second quarter air traffic volumes grew by 4.1 per cent compared to the same period in the prior fiscal year.
April 14, 2015 By NAV Canada
The company’s fiscal year runs from September 1 to August 31. In the second quarter of fiscal 2015, the company achieved strong financial performance as evidenced by its rate stabilization account, finishing with a positive balance of $80 million. When adjusted for rate setting purposes, there is a positive “notional” balance of $98 million in the rate stabilization account, which is equal to its target balance.
“The continuing growth in air traffic is an encouraging sign, and the company continues to be a global leader in technology development as well as in the provision of safe and efficient air navigation services,” said John Crichton, president/CEO.
The company’s revenue before rate stabilization for the second quarter of fiscal 2015 was $295 million, compared to $281 million in the second quarter of fiscal 2014, mainly due to the growth in air traffic volumes.
Operating expenses before rate stabilization for the second quarter of fiscal 2015 were $270 million as compared to $258 million over the same period in fiscal 2014, mainly due to higher compensation levels, higher pension expense and inflationary increases.
Interest, depreciation and amortization expense before rate stabilization totalled $59 million as compared to $60 million over the same period in fiscal 2014.
Other income before rate stabilization for the second quarter of fiscal 2015 was $nil as compared to $11 million over the same period in fiscal 2014. As at February 28, 2015, the fair value of the company’s investments in ABCP restructured and non-restructured notes is $278 million on holdings with a face value of $297 million. Of the total fair value variances from face value of $19 million, $18 million is considered recoverable over the terms of the notes.
Based on the above, the company had an excess of expenses over revenue and other income before rate stabilization of $34 million for the second quarter of fiscal 2015. The second quarter normally has the lowest air traffic levels of the fiscal year. Since our costs are predominantly fixed in nature, an excess of expenses over revenue in this quarter is expected.