NAV CANADA Announces Third Quarter Financial Results
July 14, 2011, Ottawa - NAV CANADA has released its financial results for the three and nine months ended May 31, 2011.
July 14, 2011, Ottawa – NAV CANADA has released its financial results for the three and nine months ended May 31, 2011. The third quarter results show continued success in controlling costs while maintaining safe and efficient air navigation services, as well as more robust air traffic volumes that were up 5.3 per cent from the comparable period in the prior year.
In the third quarter of fiscal 2011, the Company has achieved positive financial performance as evidenced by an improvement of $ 12 million in the rate stabilization account, finishing with a positive(i) balance of $ 28 million. When adjusted for rate setting purposes, there is a positive(i) "notional" balance of $ 89 million in the rate stabilization account, which is equal to its target balance. Positive free cash flow during the quarter was $ 11 million and has been $ 64 million for the first nine moths of the fiscal year.
"We continue to see traffic growth above expectations with an associated positive impact on our financial results" said John Crichton, President & CEO. "However, the overall economic picture is decidedly mixed, with global events a major preoccupation for everyone in the aviation business.
"Our best response to these economic challenges is to continue delivering safe, efficient and cost effective air navigation services, while collaborating with our customers in finding ways to reduce their fuel burn through more efficient flight operations. NAV CANADA employees have earned our customers' respect for the leadership they have shown in this regard."
The Company's revenues before rate stabilization for the third quarter of fiscal 2011 were $ 298 million, compared to $ 282 million for the comparable period in the previous year.
Operating expenses before rate stabilization for the third quarter were $ 246 million, which was $ 9 million higher than in the third quarter of last year.
The fair value of the Company's investments in ABCP restructured notes increased by $ 12 million (fair value of $ 246 million) on holdings with a face value of $ 313 million. Of the total fair value provision of $ 67 million, $ 61 million is considered recoverable over the terms of the notes.
Interest, depreciation and amortization expense before rate stabilization totalling $ 62 million was comparable to the prior year.
Based on the above, the Company had an excess of expenses over revenues and other income after rate stabilization of $ 8 million for the quarter. Given the seasonality of air traffic and the fact that our costs are predominantly fixed in nature, an excess of expenses over revenues during the quarter was expected. Excluding rate stabilization adjustments, revenues and other income would have exceeded expenses by $ 4 million for the quarter.
The Company's Financial Statements and Management's Discussion and Analysis for the three and nine months ended May 31, 2011 can be found at:
- Financial Statements
- Management's Discussion and Analysis
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 from coast to coast to coast, NAV CANADA provides air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation.
(i)A positive/negative balance in the rate stabilization account represents a liability/asset on the Company's consolidated balance sheet, reflecting amounts returnable to/recoverable from customers through future customer service charges.
This press release contains certain forward-looking statements that are subject to important risks and uncertainties. Actual results may differ materially from the results indicated in these statements for a number of reasons. NAV CANADA disclaims any intention to update any forward-looking statements.