Embraer Earnings Results 1st Quarter 2020

posted on 1st June 2020 by Eddie Saunders
Embraer Earnings Results 1st Quarter 2020

EMBRAER S.A. releases its First Quarter Earnings Results.

HIGHLIGHTS

  • Embraer delivered nine executive jets (five light / four large) and five commercial jets in 1Q20, and the Company’s firm order backlog at the end of 1Q20 was US$ 15.9 billion;
  • EBIT and EBITDA in 1Q20 as reported were US$ (46.9) million and US$ 9.3 million, respectively, yielding EBIT margin of -7.4% and EBITDA margin of 1.5%. This compares to EBIT of US$ (15.2) million (-1.8% EBIT margin) and EBITDA of US$ 30.9 million (3.8% EBITDA margin) in 1Q19.
  • The 1Q20 results include special items due to the impacts of COVID-19: 1) US$ 22.2 million in negative fair value changes on the Company’s stake in Republic Airways Holdings, and 2) US$ 33.4 million in bad debt provisions on accounts receivables, as the Company adopted a more conservative approach in the context of the COVID-19 pandemic;
  • Adjusted EBIT and EBITDA were US$ 8.7 million and US$ 64.9 million, respectively, yielding adjusted EBIT margin of 1.4% and adjusted EBITDA margin of 10.2%;
  • 1Q20 Net loss attributable to Embraer shareholders and Loss per ADS were US$ (292.0) million and US$ (1.59), respectively. Adjusted net loss (excluding special items and deferred income tax and social contribution) for 1Q20 was US$ (104.0) million, with Adjusted loss per ADS of US$ (0.57). The adjusted net loss in 1Q19 was US$ (61.8) million, for an adjusted loss per ADS of US$ (0.34) in the quarter;
  • Embraer reported Free cash flow of US$ (676.5) million in 1Q20, in line with free cash flow of US$ (665.3) million reported in 1Q19, which is historically negative due to seasonal working capital consumption;
  • Embraer’s liquidity remains solid as the Company finished the quarter with total cash of US$ 2,500.6 million and major debt maturities starting in 2022 onwards. Total debt at the end of 1Q20 was US$ 3,832.2 million, yielding a net debt position of US$ 1,331.6 million versus net debt of US$ 1,103.7 million in 1Q19. Embraer continues to evaluate additional financing to further enhance its cash position;
  • Due to the uncertainty related to the COVID-19 pandemic, financial and deliveries guidance for the Company’s 2020 results remains suspended at this point.