OTTAWA, Jan. 12 /CNW/ - NAV CANADA today released its financial results
for the three months ended November 30, 2010. The results show
continued success in controlling costs while maintaining safe and
efficient air navigation services, as well as more robust air traffic
that was up 5.4 per cent from the comparable period in the prior year.
In the first quarter of fiscal 2011, the Company had an excess of
expenses over revenues and other income after rate stabilization of $ 2
million. The balance in the rate stabilization account improved by $18
million during the quarter, finishing with a negative* balance of $ 2
million. However, when adjusted for rate setting purposes, there is a
positive* "notional" balance of $90 million in the rate stabilization
account, which reflects the Company's expectation that the market value
portion of the fair value adjustments to the carrying value of its
restructured notes and asset-backed commercial paper (ABCP) investments
will be recovered over the terms of these investments. The current
"notional" balance is essentially equal to its fiscal year 2011 target
positive balance of $ 89 million.
"The good news from the quarter was the continued growth in traffic
compared to budget and the positive impact on our revenues," said John
Crichton, NAV CANADA President & CEO. "This growth, combined with
continued efforts by all employees to control costs in line with
safety, has allowed us to maintain the positive notional balance in our
rate stabilization account at a level consistent with our target for
"Looking ahead, we can see reasons for optimism, but it must be cautious
optimism. Although the global economic recovery is beginning to pick
up, there is still continued economic uncertainty in areas such as
Europe and the U.S. We intend to maintain our focus on safety, service
and cost effectiveness, delivering value to our customers whatever the
economic conditions may be."
The Company's revenues before rate stabilization for the first quarter
of fiscal 2011 were $297 million, compared to $281 million for the
comparable period in the previous year.
Operating expenses before rate stabilization for the quarter were $235
million. Operating expenses were $7 million higher than in the first
quarter of last year. Management continues to effectively manage
headcount and overtime to partially offset somewhat higher compensation
levels, pension expenses and inflationary increases.
Interest, depreciation and amortization expense before rate
stabilization totalling $65 million was $5 million higher than in the
comparable period of the prior year. The fair value of the Company's
investments in ABCP restructured notes increased by $18 million (fair
value of $221 million) on holdings with a face value of $351 million.
Of the total fair value provision of $130 million, $92 million is
considered recoverable over the terms of the notes.
The Company's Financial Statements and Management's Discussion and
Analysis for the three months ended November 30, 2010 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:
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Manager, Media Relations
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