Embraer posts narrowing first half loss

written by australianaviation.com.au | August 19, 2019
A file image of an Embraer E190-E2. (Embraer)
A file image of an Embraer E190-E2. (Embraer)

Embraer chief executive Francisco Gomes Neto says the airframer is well positioned for a promising future after the company posted a narrowing a first half loss in calendar 2019.

The Brazil-based manufacturer reported a net loss of US$32 million for the six months to June 30 2019, an improvement from a loss of US$164.5 million in the prior corresponding period.

Revenue was broadly unchanged at US$2.202 billion, compared with US$2.214 billion a year ago, the company said in a regulatory filing on August 14 (Brazil time).

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Embraer said the bottom line had been impacted by low operating results and also higher financial expenses, given our increased leverage”.

Neto, presenting his first set of financial results since taking the helm three months ago said, Embraer was “very well positioned for a promising future”.

This was due to a combination of its “state-of-the-art products, continued progress in becoming a more efficient company, the continued support of our customers and the consummation of the strategic partnership with Boeing”.

“After what I have experienced in Embraer in this initial months, I’m convinced that the company will return to its growth path,” Neto said.

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“With our team working in a lean manner with ethics, unity and oriented by results, we believe Embraer will recover and even surpass its current market value.”

The quarterly results showed a return to the black with a net profit of US$9.2 million for the three months to June 30 2019, up from a loss of US$129.6 million a year ago.

EMBRAER-BOEING PARTNERSHIP

On July 5 2018, Boeing and Embraer announced plans to establish a joint-venture that aims to boost their competitive offerings in the commercial aircraft sector.

Boeing will acquire an 80 per cent stake in Embraer’s commercial aircraft operations for US$4.2 billion, effectively adding the E-Jet family to its own commercial airliner line-up. Embraer will hold a 20 per cent stake in the new JV.

In February, the Brazil-headquartered company said 96.8 per cent of shareholders had approved the the proposed partnership with Boeing.

However, the deal still required the approval of antitrust authorities in Brazil and the United States.

The transaction was expected to be completed by the end of 2019, subject to all approvals being obtained in a timely manner.

“We continue to work on several fronts to ensure that the strategic partnership between Embraer and Boeing is successfully concluded,” Neto said.

“And all of our employees, regardless of whether they will remain with Embraer or eventually work in Boeing Brasil – Commercial, are fully engaged with the necessary processes to complete this important transaction.”

As previously disclosed, the airframer delivered 26 commercial aircraft in the second quarter of calendar 2019, two fewer than the prior corresponding quarter.

The company said said first delivery of the E195-E2, which was certified in April and recently visited Australia, to launch customer Azul would occur before the end of September 2019.

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Meanwhile, the number of business jet deliveries increased by five aircraft to 25 aircraft.

A file image of an Embraer Executive Jets Praetor 600. (Embraer/Twitter)
A file image of an Embraer Executive Jets Praetor 600. (Embraer/Twitter)

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