OTTAWA, Jan. 8 /CNW Telbec/ - NAV CANADA today released its financial
results for the three months ended November 30, 2008. A decline in air traffic
and a reduction in the fair value of its investments in asset-backed
commercial paper were partially offset by favourable cost variances from plan
during the first quarter of its 2009 fiscal year.
"The worsening economic environment in the first quarter of fiscal 2009
was reflected in lower air traffic levels compared to the same period in
fiscal 2008," said John Crichton, NAV CANADA President & CEO. "While this
translated into lower revenues, the performance of our employees in delivering
safe air navigation services while controlling costs has been exemplary. We
will continue to make the safe and efficient movement of aircraft our number
one priority, while working with employees, customers, suppliers, and other
stakeholders in managing through this economic downturn."
The Company's revenues before rate stabilization for the first quarter of
fiscal 2009 were $ 296 million, compared to $ 300 million for the comparable
period in the previous year. The lower revenues arose primarily from a 2.2 per
cent year-over-year decrease in air traffic volumes.
Operating expenses before rate stabilization for the quarter were $ 235
million which was $ 1 million higher than the comparable period in the prior
year, primarily due to higher compensation levels.
During the first quarter, other expenses totalling $ 61 million were $ 2
million lower than in the comparable period in the prior year. This was
primarily due to lower interest expense partially offset by the depreciation
of new capital assets.
During the first quarter, the Company reduced the fair value of its
investments in asset-backed commercial paper (ABCP) by $ 42 million, in
addition to the $ 122 million of fair value adjustments recorded in prior
periods. This was partially offset by $ 1 million of interest income received
compared to $ 2 million of interest income in the previous year.
"Most of the reduction in the fair value of our ABCP investments should
be recoverable over time, under the restructuring plan that is now in its
final phase," Crichton said. "Along with other participants in the process, we
look forward to replacing our ABCP holdings with longer term securities as we
proceed to conclusion of the restructuring this month."
The foregoing resulted in an excess of expenses over revenues before rate
stabilization of $ 41 million in the first quarter of fiscal 2009. While NAV
CANADA intends to break even on an annual basis, quarterly results may
indicate an imbalance between revenues and expenses due to seasonal
fluctuations in air traffic and other factors. In order to achieve planned
results, the Company recorded a $ 41 million reduction in the rate
stabilization account. During the first quarter of fiscal 2009, the Company's
rate stabilization liability account decreased to a rate stabilization asset
of $ 37 million.
The Company's financial statements and Management's Discussion and
Analysis for the three months ended November 30, 2008 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; Ron Singer, Manager, Media Relations, (613) 563-7303; Nadège Adam,
Advisor, Media Relations, (613) 563-5972; Media Information Line: