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Embraer reports just five commercial jet deliveries for Q1 2020

written by Sandy Milne | June 2, 2020
A 2019 supplied image of an Embraer E190 in Cobham livery. (Cobham Aviation Services)
A 2019 supplied image of an Embraer E190 in Cobham livery. (Cobham Aviation Services)

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.

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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;

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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.

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