NAV CANADA announces third quarter financial results
NAV CANADA today released its financial results for the three and nine months ended May 31, 2007.
(Ottawa, July 12, 2007) – NAV CANADA today released its financial results for the three and nine months ended May 31, 2007. Growth in air traffic and favourable cost variances from plan contributed to an improvement in the Company’s financial position during the third quarter of its 2007 fiscal year.
“Thanks to the efforts of all employees to control costs as traffic grows, we are able to deliver increased customer value through a reduction in our service charges” said John Crichton, NAV CANADA President & CEO.
“As announced earlier today, we will be reducing charges by another 3 per cent effective August 1, 2007, following the average 1.8 per cent reduction that was implemented on September 1, 2006. In addition, the Company will provide a further 1 per cent temporary reduction in customer service charges for the period August 1, 2007 to August 31, 2008.
“The total reductions will therefore be 4 per cent, saving 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 rate reduction adjustments for the third quarter of fiscal 2007 were $ 297 million, compared to $ 289 million for the same period in the previous year. The higher revenues arose primarily from a 4.0 per cent year-over-year increase in air traffic volumes, partially offset by the average 1.8 per cent reduction in customer service charges referred to above.
Operating expenses before rate stabilization for the quarter were $ 246 million which was $ 22 million higher than in the comparable period last year. This increase was primarily due to higher pension costs and compensation levels and the recording in Q3 fiscal 2006 of the recovery of unpaid customer service charges related to Canada 3000 and Inter-Canadien, Inc.
During the third quarter, interest and depreciation totalling $ 57 million was $ 4 million lower than the same period in the prior year. This was primarily as a result of interest expense incurred in Q3 fiscal 2006 associated with the early redemption of the series 96-2 6.6 per cent revenue bonds.
The foregoing resulted in an excess of expenses over revenues of $ 6 million in the third quarter of fiscal 2007, before considering a $ 14 million improvement in the rate stabilization account and a $ 7 million transfer from the rate reduction obligation. While NAV CANADA intends to break even on an annual basis, quarterly results fluctuate due to seasonality in air traffic and other factors.
The Company’s financial statements and Management's Discussion and Analysis for the three and nine months ended May 31, 2007 are available on NAV CANADA’s website at: www.navcanada.ca .
NAV CANADA, the country’s civil air navigation services provider, is a private sector, non-share capital corporation financed through publicly-traded debt. With operations coast to coast, NAV CANADA provides air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation.