MONTREAL, Nov. 12 /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 third quarter ended September 30, 2009.
Revenue reached $54.9 million, a decline of 4.2%, or $2.4 million, over revenue of $57.3 million during the third quarter a year ago. Visual Flight Rules (VFR) revenue decreased by $3.5 million following a 36.1% decline in light aircraft operations due to a weak domestic natural resources sector, partially offset by higher revenues on medium category aircraft, including Canadian Helicopters' contract work in Afghanistan, and higher fire suppression activity in western Canada. Instrument Flight Rules (IFR) revenue increased by 14.0% primarily due to a more favorable revenue mix and the U.S. dollar exchange rate. Ancillary revenue, including the CFTS contract, decreased by $1.4 million due to the conclusion of contractual commitments in 2008. Reflecting the substantial decline in resource-based activity in Canada, revenue-flying hours declined 25.7% to 22,385 hours.
EBITDA was $23.1 million compared with $20.7 million a year earlier. Operating expenses decreased 17.9% to $30.2 million due mainly to lower maintenance activity and crew costs, which largely mirror aircraft utilization, and to reduced selling, general and administrative expenses. Net earnings before non-controlling interest reached $16.5 million, or $1.26 per unit, compared with $14.5 million, or $1.09 per unit, in the third quarter of 2008.
Cash flows related to operating activities before net changes in non-cash working capital balances stood at $17.4 million, up 4.4% from $16.6 million a year ago as a result of higher net earnings. The Fund generated distributable cash of $17.3 million, or $1.32 per unit, up 18.7% over $14.6 million, or $1.10 per unit, last year.
Financial Highlights Quarters ended Nine months
(in thousands of dollars, Sept. 30, ended Sept. 30,
except per unit data) 2009 2008 2009 2008
Revenue 54,917 57,291 122,785 123,872
EBITDA (1) 23,141 20,722 30,943 27,505
Net earnings before
interest 16,516 14,502 24,153 19,748
Per unit - basic
and diluted ($) 1.26 1.09 1.84 1.49
Distributable cash 17,303 14,574 26,066 22,517
Per unit - basic
and diluted ($) 1.32 1.10 1.99 1.70
(including Class B) 13,098,374 13,280,000 13,098,590 13,280,000
(1) Earnings before interest, income taxes, depreciation and
amortization, gain or loss on disposal of property, plant and
equipment and non-controlling interest
The Fund ended the third quarter of 2009 in a strong financial position with cash and cash equivalents of $26.3 million and unused debt facilities. As at September 30, 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 $81.3 million.
"Canadian Helicopters' improved profitability in the third quarter reflects a favourable business mix and most importantly a tight rein on operating expenses," said Don Wall, President and CEO of Canadian Helicopters Income Fund. "While weakness in the domestic resources sector reduced overall activity significantly, our entire fleet generated greater revenue and contribution per hour flown. The resulting strong cash flow generation and unlevered balance sheet will provide a buffer against further resource weakness and provides the flexibility to continue seeking diversification initiatives in profitable market opportunities."
Canadian Helicopters' revenue stood at $122.8 million, a decrease of 0.9%, or $1.1 million, versus revenue of $123.9 million in the first nine months of 2008. Year-to-date VFR revenue decreased by $3.0 million, IFR revenue increased by 8.7%, while ancillary revenue decreased by $2.1 million. Revenue flying hours were down 23.5% to 47,235 hours, mainly reflecting reduced resource-based activity.
EBITDA reached $30.9 million compared with $27.5 million last year, while net earnings before non-controlling interest rose 22.3% to $24.2 million, or $1.84 per unit, up from $19.7 million, or $1.49 per unit, a year earlier. Cash flows from operating activities before net changes in non-cash working capital balances amounted to $25.0 million, stable in comparison with $24.7 million in the first nine months of 2008, as higher net earnings were partially offset by current income tax expenses related primarily to the taxable gain incurred with the disposal of assets to Ornge on March 31, 2009. Distributable cash reached $26.1 million, or 1.99 per unit, in the first nine months of 2009, up from $22.5 million, or $1.70 per unit, a year ago.
"Our reputation for superior service, professionalism and our commitment to the safety of flight operations continues to solidify our brand. All of these factors have positioned Canadian Helicopters to pursue business opportunities where this is valued more aggressively. In the short term, trends experienced in the natural resource sector are expected to continue into early 2010. Still, a large proportion of our services are essential in nature, and therefore less subject to volatility in the economy," concluded Mr. Wall.
Canadian Helicopters will hold a conference call to discuss these results on Friday, November 13, 2009 at 11:00 AM (EDT). Interested parties can join the call by dialing 416-915-5762 (local) or 1-800-590-1508 (toll free). If you are unable to call at this time, you may access a tape recording of the meeting by calling 416-640-1917 (local) or 1-877-289-8525 (toll free) followed by access code 4180393 followed by #. This tape recording will be available until Friday, November 20, 2009.
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. From over 40 base locations across Canada, Canadian Helicopters provides helicopter services to a broad range of sectors, including emergency medical services, infrastructure maintenance, military support, utilities, oil and gas, forestry, mining and construction. In addition to helicopter transportation services, Canadian Helicopters operates three flight schools and provides third party repair and maintenance services. 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 CEO, Canadian Helicopters Income Fund, (780) 429-6919