28th July, 2017
Embraer SA returned to profit in the second quarter as the Brazilian aircraft manufacturer ramped up deliveries of narrow body E-Jets to airlines and brought down operating costs through job cuts and controls on corporate expenses.
The world's third-largest commercial planemaker reported a profit of US$59 million on Friday. Removing the impact of a weaker Brazilian currency on Embraer's deferred tax bill, net income would have jumped to US$123 million. In the second quarter 2017, Embraer delivered 35 commercial and 24 executive jets. The Company’s firm order backlog ended the quarter at US$18.5 billion;
Last year Embraer booked a US$99 million second-quarter net loss, due to a corruption probe that culminated in a US$206 million settlement with U.S. and Brazilian authorities. On Friday the company said it had filed a motion to dismiss a class action suit related to the case, which the court had not yet ruled on.
The company's strongest quarter for deliveries to airlines in five years lifted revenue 30 percent from a year ago to US$1.77 billion. A delayed satellite launch and solid demand for new mid-size Legacy business jets also boosted Embraer's top line.
Recurring operating costs fell 36 percent due to a cost-cutting drive that reduced staffing levels and clamped down on corporate expenses, part of Chief Executive Paulo Cesar Silva's effort to cut US$200 million from the company's annual budget.
Core earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to US$255 million, from negative EBITDA of US$56 million a year earlier. Embraer also reaffirmed all of its 2017 operational and financial performance estimates.