OTTAWA, April 8 /CNW/ - NAV CANADA today released its financial results
for the three and six months ended February 28, 2011. The second
quarter results show continued success in controlling costs while
maintaining safe and efficient air navigation services, as well as more
robust air traffic volumes that were up 4.1 per cent from the
comparable period in the prior year.
In the second quarter of fiscal 2011, the Company has achieved positive
financial performance as evidenced by an improvement of $ 18 million in
the rate stabilization account, finishing with a positive* balance of
$ 16 million. However, when adjusted for rate setting purposes, there
is a positive* "notional" balance of $ 89 million in the rate
stabilization account, which is equal to its target balance.
"Thanks to the efforts of all employees, our operational and financial
performance during the quarter was excellent, and this has allowed us
to maintain the positive notional balance in our rate stabilization
account at a level consistent with our target for the year," said John
Crichton, President & CEO. "However, while the traffic and revenue
picture continues to be positive, global events have once again
injected a strong note of caution for everyone in the aviation
"The rising price of oil, the impact of the crisis in Japan, and the
unsettled conditions in the Middle East are all beginning to have an
effect on industry growth. As a result, NAV CANADA will continue to be
vigilant in the management of our costs going forward, while delivering
the safe, efficient and modern air navigation services our customers
have come to expect."
The Company's revenues before rate stabilization for the second quarter
of fiscal 2011 were $ 270 million, compared to $ 263 million for the
comparable period in the previous year.
Operating expenses before rate stabilization for the second quarter were
$ 235 million, which was $ 3 million higher than in the second quarter
of last year. Management continues to effectively manage headcount and
overtime to partially offset somewhat higher compensation levels,
pension expenses and inflationary increases. The negotiated return of
long-term disability premiums from its benefits provider during the
second quarter resulted in a reduction of $ 11 million in expenses.
The fair value of the Company's investments in ABCP restructured notes
increased by $ 34 million (fair value of $ 234 million) on holdings
with a face value of $ 313 million. Of the total fair value provision
of $ 79 million, $ 73 million is considered recoverable over the terms
of the notes. During the second quarter, the Company sold ABCP
restructured notes with a face value of $ 37 million for an amount that
was $ 2 million greater than their carrying value.
Interest, depreciation and amortization expense before rate
stabilization totalling $ 64 million was $ 4 million higher than in the
comparable period of the prior year.
Given the above, the Company had an excess of expenses over revenues and
other income after rate stabilization of $ 27 million for the quarter.
The second quarter normally has the lowest air traffic levels of the
year. Since our costs are predominantly fixed in nature, an excess of
expenses over revenues is expected. Excluding rate stabilization
adjustments, expenses would have exceeded revenues and other income by
$ 9 million for the quarter.
The Company's Financial Statements and Management's Discussion and
Analysis for the three and six months ended February 28, 2011 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 from coast to coast to coast, NAV
CANADA provides air traffic control, flight information, weather
briefings, aeronautical information services, airport advisory services
and electronic aids to navigation.
* A positive/negative balance in the rate stabilization account
represents a liability/asset on the Company's consolidated balance
sheet, reflecting amounts returnable to/recoverable from customers
through future customer service charges.
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
SOURCE NAV CANADA
For further information:
| John Morris |
| Ron Singer |
Manager, Media Relations
Media Information Line: 1-888-562-8226