OTTAWA, April 13 /CNW Telbec/ - NAV CANADA today released its financial
results for the three and six months ended February 28, 2007. Growth in air
traffic and favourable cost variances from plan contributed to an improvement
in the Company's financial position during the second quarter of its 2007
"Increased traffic growth together with the Company's continued focus on
cost control, provide the opportunity to offer lower service charges to our
customers while meeting our essential safety and service obligations" said
John Crichton, NAV CANADA President and CEO. "In addition to an average
1.8 per cent reduction in rates that came into effect last September, we are
now proposing a further three per cent decrease in rates effective September
1, 2007, as announced yesterday."
In establishing customer service charges for fiscal 2007, the Board of
Directors approved a $ 29 million drawdown of the rate stabilization account
in order to achieve planned breakeven results of operations. This $ 29 million
rate reduction obligation is being transferred to revenue evenly throughout
the year ($ 7 million per quarter).
The Company's revenues before rate stabilization and rate reduction
adjustments for the second quarter of fiscal 2007 were $ 269 million, compared
to $ 264 million for the same period in the previous year. The higher revenues
arose primarily from a 5.0 per cent year-over-year increase in air traffic
volumes, partially offset by the average 1.8 per cent reduction in customer
service charges referred to above and a decrease in other revenues.
Operating expenses before rate stabilization for the quarter were $ 235
million which was $ 14 million higher than in the comparable period last year.
This increase was primarily due to higher pension costs and compensation
During the second quarter, interest and depreciation totalling $ 58
million was $ 3 million higher than the same period in the prior year. This
was primarily as a result of higher depreciation expense related to the
introduction of new operational systems on which depreciation was taken for
the first time.
The foregoing resulted in an excess of expenses over revenues of $ 24
million in the second quarter of fiscal 2007, before considering an $ 11
million improvement in the rate stabilization account and the $ 7 million
transfer from the rate reduction obligation. While NAV CANADA intends to break
even on an annual basis, quarterly results fluctuate due to seasonality in air
traffic and other factors. With these latest results, the balance in the
Company's rate stabilization account is now $ 86 million.
The Company's financial statements and Management's Discussion and
Analysis for the three and six months ended February 28, 2007 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
For further information:
For further information: John Morris, Director, Communications, (613)
563-7032; Louis Garneau, Manager, Media Relations, (613) 563-5972; Ron Singer,
Communications Advisor, (613) 563-7303; Media Information Line: