OTTAWA, Oct. 23 /CNW Telbec/ - NAV CANADA today released its financial results for the year ended August 31, 2009. The results show significant success in reducing costs, during a year when the Company also experienced a significant reduction in air traffic levels and revenues. In fiscal 2009, the Company had an excess of expenses over revenues and other income before rate stabilization of $ 26 million. In fiscal 2008, expenses exceeded revenues and other income before rate stabilization by $ 69 million.
In spite of monthly year-over-year declines in air traffic that continued during the fourth quarter, cost savings were achieved through headcount reductions, a transfer of responsibility for post-employment benefits to a union trust fund and reductions in discretionary spending without impacting safety.
While the Company does not intend to increase customer service charge levels at this time, we will continue to carefully monitor air traffic levels and, in January 2010 we will evaluate the need for a rate increase for effect thereafter in accordance with the ANS Act.
"This has been a challenging year for our customers and for the Company, with declining traffic and revenues a reflection of the global economic downturn," said John Crichton, NAV CANADA President & CEO. "But NAV CANADA people have been equal to the task, and as a result we were able to reduce costs in step with the revenue decline."
The Company's revenues before rate stabilization for fiscal 2009 were $ 1,163 million, compared to $ 1,228 million for the previous year. The lower revenues arose primarily from a 6.0 per cent year-over-year decline in air traffic volumes.
Operating expenses before rate stabilization for the current fiscal year were $ 905 million which was $ 56 million lower than in the previous year. Management continues to effectively manage headcount and overtime to offset somewhat higher compensation levels. A curtailment and settlement within a post-employment benefit plan during the fourth quarter resulted in a one-time gain of $ 40 million.
Interest, depreciation and amortization expense before rate stabilization totalling $ 252 million were $ 2 million lower than in the previous year. This was primarily due to higher depreciation of capital assets offset by lower interest expense.
During fiscal 2009, the Company recorded a decrease of $ 35 million in the value of its investments in asset-backed commercial paper (ABCP) restructured notes, bringing the total fair value to $ 203 million on holdings with a face value of $ 362 million. Of the fair value provision of $ 159 million, $ 118 million is considered recoverable over the term of the notes.
The Company finished the 2009 year with a rate stabilization account liability of $ 1 million. However, for rate setting purposes, the balance in the rate stabilization account, adjusted notionally, is approximately $ 119 million, since the Company considers that the majority of the fair value adjustments that have been recorded on its ABCP investments should be recoverable over the time that the Company continues to hold them.
The Company's Financial Statements, Annual Information Form and Management's Discussion and Analysis for the year ended August 31, 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, except as required by applicable securities legislation.
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