OTTAWA, Jan. 13 /CNW/ - NAV CANADA today released its financial results for the three months ended November 30, 2009, which is the first quarter of its 2010 fiscal year. The results show continued success in controlling costs while maintaining safe and efficient air navigation services, despite a continued reduction in air traffic levels and revenues compared to the first quarter of fiscal 2009.
In the first quarter of fiscal 2010, the Company had an excess of expenses over revenues and other income after rate stabilization of $ 6 million. The Company finished the quarter with a rate stabilization account liability of $ 2 million. However, when adjusted for rate setting purposes, there is a notional balance in the rate stabilization account of $ 119 million, which reflects the Company's expectation that the majority of the fair value adjustments on its asset-backed commercial paper investments will be recovered over the terms of these investments.
"Our results reflect the impact of the global economic downturn on all our customers," said John Crichton, NAV CANADA President & CEO. "While some improvement is anticipated during fiscal 2010, the aviation industry is still facing an extremely challenging traffic and revenue environment.
"NAV CANADA is well aware of the need to maintain our focus on safe and efficient air navigation services while controlling our discretionary expenses, and this is reflected in our results," he added.
In light of the notional balance in the rate stabilization account, the Company does not intend to increase customer service charges at this time. "We will continue to carefully monitor air traffic and revenue, and in April 2010 we will reconsider the need for a change in rates for effect thereafter, in accordance with the ANS Act," stated Crichton.
The Company's revenues before rate stabilization for the first quarter of fiscal 2010 were $ 281 million, compared to $ 296 million for the comparable period in the previous year. The lower revenues arose primarily from a 5.7 per cent year-over-year decline in air traffic volumes.
Operating expenses before rate stabilization for the quarter were $ 228 million, after capitalizing $ 13 million more of internal labour and travel costs than in the prior year period, in line with the Company's revised accounting policy. Operating expenses were $ 7 million lower than in the first quarter of last year. Management continues to effectively manage headcount and overtime to offset somewhat higher compensation levels.
Interest, depreciation and amortization expense before rate stabilization totalling $ 60 million was $ 1 million lower than in the comparable period of the prior year. The fair value of the Company's investments in ABCP restructured notes remained stable at $ 204 million on holdings with a face value of $ 362 million. Of the total fair value provision of $ 158 million, $ 117 million is considered recoverable over the term of the notes.
The Company's Financial Statements and Management's Discussion and Analysis for the three months ended November 30, 2009 are available on NAV CANADA's website at: www.navcanada.ca.
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 coast to coast, NAV CANADA provides air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation.
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.
SOURCE NAV CANADA
For further information: For further information: John Morris, Director, Communications, (613) 563-7032; Ron Singer, Manager, Media Relations, (613) 563-7303; Media Information Line: 1-888-562-8226, www.navcanada.ca