Brazilian aerospace manufacturer Embraer has posted its results for the first quarter of the 2020 financial year.
Delivering just five commercial jets and nine executive jets (five light/four large), the report shows the effects of a crisis that has cut deep. Though Q1 sales are typically lower across the board, by comparison the company delivered 17 commercial aircraft in Q3 2020.
This leaves it with a firm order backlog of US$15.9 billion.
Unlike many of its competitors and suppliers, Embraer reported a strong liquidity position, with nearly US$676.5 million in free cash flow. The company finished the quarter with total cash holdings of US$2,500.6 million and major debt maturities starting in 2022 onwards. Total debt at the end of Q1 2020 was US$3,832.2 million, yielding a net debt position of US$1,331.6 million versus net debt of US$1,103.7 million in Q1 2019.
Earnings before interest and taxes (EBIT) in Q1 2020 were reported as US$46.9 million, yielding EBIT margin of -7.4 per cent. This compares to EBIT of US$15.2 million (-1.8 per cent EBIT margin) in Q1 2019.
The Q1 2020 results include special items due to the impacts of COVID-19:
1) US$22.2 million in negative fair value changes on the company’s stake in Republic Airways Holdings; and
2) US$33.4 million in bad debt provisions, as the company adopted a more conservative approach in the context of the COVID-19 pandemic;
Adjusted EBIT and EBITDA were US$8.7 million and US$64.9 million, respectively, yielding adjusted EBIT margin of 1.4 per cent and adjusted EBITDA margin of 10.2 per cent.