MONTREAL, March 17 /CNW Telbec/ - Canadian Helicopters Income Fund (TSX: CHL.UN) ("the Fund"), the largest helicopter transportation services company operating in Canada, today announced its financial and operating results for the fourth quarter and fiscal year ended December 31, 2009.
2009 YEAR-END RESULTS
The Fund generated revenue of $154.2 million, an increase of 2.2%, or $3.3 million, over revenue of $150.9 million in 2008. Visual Flight Rules (VFR) revenue grew $3.5 million primarily due to revenues from aircraft contracted in Afghanistan and higher fire suppression activities, partially offset by a 34.7% decline in domestic operations reflecting a weak resources market. Instrument Flight Rules (IFR) revenue increased by 1.2% primarily resulting from a more favorable revenue mix and the U.S. dollar exchange rate. Ancillary revenue, including the CFTS contract, decreased in 2009 by $0.9 million due to specific contract amendments concluded in 2008. Revenue-flying hours decreased by 20.8% to 57,789 hours as a result of the substantial decline in resource-based activity across Canada.
EBITDA was $30.8 million compared with $26.0 million a year earlier. Operating expenses decreased 3.0% to $121.7 million due mainly to lower maintenance activity and crew costs, which largely mirror aircraft utilization. Selling, general and administrative expenses rose $2.4 million as a result of higher insurance and mobilization costs in relation to the support contract in Afghanistan as well as a payment in regard to the retirement of the Fund's previous president. Net earnings before non-controlling interest reached $26.8 million, or $2.05 per unit, up 38.8% from $19.3 million, or $1.46 per unit, in 2008.
As a result of higher net earnings, the Fund generated cash flows related to operating activities before net changes in non-cash working capital balances of $28.0 million, compared with $25.8 million a year earlier. Distributable cash amounted to $26.9 million, or $2.05 per unit, up 27.5% over $21.1 million, or $1.59 per unit, last year. The payout ratio of 54% marked a significant improvement over a payout ratio of 69% in 2008, and the lowest payout ratio since the Funds inception in 2005.
Financial Highlights Quarters ended Years ended
(in thousands of dollars, Dec. 31, Dec. 31,
except per unit data) 2009 2008 2009 2008
Revenue 31,429 27,046 154,215 150,918
EBITDA(1) (125) (1,473) 30,818 26,032
Net earnings before non-
controlling interest 2,671 (426) 26,823 19,321
Per unit - basic and
diluted ($) 0.20 (0.03) 2.05 1.46
Distributable cash 3,539 419 26,859 21,066
Per unit - basic and
diluted ($) 0.27 0.03 2.05 1.59
Payout ratio n/m n/m 54% 69%
Class B) 13,068,971 13,228,540 13,091,125 13,267,064
(1) Earnings before interest, income taxes, depreciation and
amortization, gain or loss on disposal of property, plant and
equipment, share of net loss of a company subject to significant
influence and non-controlling interest
The Fund ended the year in a strong financial position with cash and cash equivalents of $43.1 million and unused debt facilities. As at December 31, 2009, the Fund had $15.0 million and $40.0 million available under its operating and term credit facilities, respectively, while combined cash and credit facilities amounted to $98.1 million.
"As demonstrated by our satisfactory results in 2009, the business of Canadian Helicopters has proven resilient in the face of economic downturn," said Don Wall, President and Chief Executive Officer of Canadian Helicopters. "Our diversified client base, long-term relationships, and success in our initial overseas mandate more than offset weak domestic demand and pricing pressures. Increases in both our top and bottom line revenues during a year of lingering recession also speak to our ability to control costs, and position us for growth initiatives going forward."
Canadian Helicopters' revenue stood at $31.4 million, an increase of 16.3% over revenue of $27.0 million in the fourth quarter of 2008. VFR revenue increased by $6.5 million, reflecting contract work in Afghanistan offset by lower domestic operations due to a weak resource market. IFR revenue decreased by 23.6% as a result of the loss of the operation and maintenance contract in support of the North Warning System for the U.S. Air Force. Ancillary revenue increased by $1.3 million due to the conclusion of some contractual commitments in 2009. Revenue flying hours were down 5.5% to 10,554 hours.
Driven by a more favourable revenue mix, EBITDA reached ($0.1) million compared to ($1.5) million last year. Net earnings before non-controlling interest were $2.7 million, or $0.20 per unit, up from ($0.4) million, or ($0.03) per unit, a year earlier as a result of a higher income tax recovery following a decrease in provincial enacted income tax rates during the fourth quarter of 2009. Cash flows from operating activities before net changes in non-cash working capital balances amounted to $2.9 million, up from $1.0 million in the fourth quarter of 2008. Distributable cash reached $3.5 million, or $0.27 per unit, versus $0.4 million, or $0.03 per unit, a year ago.
Certain of the Fund's operations are subject to seasonal fluctuations due to variations in daylight hours and changes in weather conditions, with the highest demand generally occurring from May to October. While some operations are dependent on flight hours and are managed to mitigate the impact of seasonality, a significant portion of operating costs, including some crew and fleet costs, as well as selling, general and administrative expenses are fixed. Canadian Helicopters takes advantage of the off-season period to conduct repairs and maintenance on its helicopters and provide training to its crews in order to minimize downtime during the peak season. This strategy, necessitated by seasonality, significantly reduces profits during the quarters ending December 31 and March 31 and has historically resulted in losses. Therefore, results for any single quarter may not be indicative of the results that may be expected for the full year.
"Although we do not expect significant recovery in domestic demand in 2010, largely due to continuing weakness in the natural resources sector, we are well positioned for an anticipated upturn in 2011. More importantly, the strong financial health of Canadian Helicopters allows us to aggressively pursue any profitable expansion opportunity that arises. Furthermore, we do believe that the second one-year renewal period of our contract with the U.S. Department of Defense in Afghanistan will be exercised next December, and that our operations in that country will continue to contribute strongly to the Fund's operations through 2011," concluded Mr. Wall.
Canadian Helicopters will hold a conference call to discuss these results on March 18, 2010 at 11:00 AM (ET). Interested parties can join the call by dialing 647-427-7450 (local) or 1-888-231-8191 (toll free). If you are unable to call at this time, you may access a tape recording of the meeting by calling 416-849-0833 (local) or 1-800-642-1687 (toll free) followed by access code 60961313 followed by #. This tape recording will be available until March 25, 2010.
ABOUT CANADIAN HELICOPTERS INCOME FUND
Through Canadian Helicopters Limited, Canadian Helicopters Income Fund is the largest helicopter transportation services company operating in Canada and one of the largest in the world based on the size of its fleet. With over 35 base locations across Canada, Canadian Helicopters provides helicopter services to a broad range of sectors, including emergency medical services, infrastructure maintenance, utilities, oil and gas, mining, forestry and construction. In addition to helicopter transportation services, Canadian Helicopters operates three flight schools, provides third party repair and maintenance services in Canada and provides military support in Afghanistan. With over 60 years of experience, Canadian Helicopters is an industry leader in establishing safety standards and operating procedures.
This press release contains forward-looking statements relating to the future performance of the Fund. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they were made. The Fund disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise unless being required by applicable laws.
DEFINITION OF NON-GAAP MEASURES: EBITDA, STANDARDIZED DISTRIBUTABLE CASH
AND DISTRIBUTABLE CASH
References to "EBITDA" are to earnings (loss) before interest, income taxes, depreciation and amortization, gain or loss on disposal of property, plant and equipment and non-controlling interest, as disclosed in the Summary of Selected Consolidated Financial Information.
Standardized Distributable Cash is a non-GAAP measure recommended by the Canadian Institute of Chartered Accountants ("CICA") in order to provide a consistent and comparable measurement of distributable cash across entities. Standardized Distributable Cash represents cash flows from operating activities, less adjustments for net maintenance capital expenditures as reported in accordance with GAAP.
Management views Distributable Cash as an operating performance measure, as it is a measure generally used by Canadian income funds as an indicator of financial performance. Distributable Cash is defined as Standardized Distributable Cash plus the net change in non-cash working capital balances and less the consideration paid by the Fund for the purchase of Units under the employee Unit purchase plan. Distributable Cash is important as it summarizes the funds available for distribution to Unitholders.
EBITDA, Standardized Distributable Cash and Distributable Cash are not earnings measures recognized under GAAP and do not have standardized meanings prescribed by GAAP. Therefore, EBITDA, Standardized Distributable Cash and Distributable Cash may not be comparable with similar measures presented by other entities. Investors are cautioned that EBITDA, Standardized Distributable Cash and Distributable Cash should not be construed as an alternative to net earnings (loss) determined in accordance with GAAP as indicators of the Fund's performance, or to cash flows from operating, investing and financing activities as measures of liquidity and cash flows.
Note to readers: Complete consolidated unaudited interim financial statements and Management's Discussion & Analysis of Operating Results and Financial Position are available on Canadian Helicopters' website at www.canadianhelicopters.com and on SEDAR at www.sedar.com.
SOURCE HNZ Group Inc.
For further information: For further information: Don Wall, President and Chief Executive Officer, Canadian Helicopters Income Fund, (780) 429-6919, (450) 452-3007