OTTAWA, July 12, 2018 (GLOBE NEWSWIRE) — NAV CANADA today released its financial results for the three and nine months ended May 31, 2018.
In the third quarter of fiscal 2018, financial performance as evidenced by its positive(1) rate stabilization account balance of $122 million was in line with expected results and reflected a planned reduction of $7 million from August 31, 2017. The Company had negative free cash flow(2) of $30 million primarily due to increased capital spending ending the quarter with cash of $28 million.
The Company’s revenue for the third quarter of fiscal 2018 was $349 million, compared to $332 million over the same period in fiscal 2017, mainly due to a year-to-date 5.3 per cent growth in air traffic volumes. In March 2018, we successfully refinanced our $350 million general obligations notes which matured in April 2018.
The Company issued a notice of revised service charges for consultation on May 28, 2018, providing details of the proposed rate revisions. The consultation period concludes on July 31, 2018.
“We recently announced a rate revision proposal that would see us decrease rates charged to our customers by an average of 0.4 per cent effective September 2018. This will effectively enable us to continue rates at the same level they were this year, by adjusting base rates by an amount equivalent to the one-year temporary reduction that was implemented on September 1, 2017” said Neil Wilson, President and CEO.
“Our positive financial performance has allowed us to make transformational investments in technology and systems which provide enhanced levels of safety for our customers while enabling improved efficiencies. We are excited to be trialing space-based surveillance technology in our air traffic control operations for both domestic and North Atlantic oceanic airspace in fiscal 2019” added Wilson.
Operating expenses for the third quarter of fiscal 2018 were $361 million as compared to $348 million over the same period in fiscal 2017, mainly due to higher compensation costs.
Net other income and expenses for the third quarter of fiscal 2018 were a net income of $14 million as compared to a net expense of $16 million over the same period in fiscal 2017, primarily due to positive fair value adjustments on our investment in Aireon in the third quarter of fiscal 2018.
The Company had a net loss (before net movement in regulatory deferral accounts including rate stabilization) of $8 million in the third quarter of fiscal 2018 as compared to a net loss of $35 million for the third quarter of fiscal 2017.
The Company is subject to legislation that regulates its approach to setting charges. The timing of the recognition of certain revenue and expenses recovered through charges is recorded through movements in regulatory deferral accounts. The net movement in regulatory deferral accounts for the third quarter of fiscal 2018 was $nil as compared to income of $27 million over the same period in fiscal 2017. This change in regulatory deferrals is due to higher deferrals of favourable results through rate stabilization adjustments of $11 million offset by a $38 million net decrease in regulatory deferral adjustments to reflect certain transactions in the periods in which they will be considered for rate setting.
The Company’s Financial Statements and Management’s Discussion and Analysis for the three and nine months ended May 31, 2018 can be found at:
About NAV CANADA
NAV CANADA is a private, not-for-profit company, established in 1996, providing air traffic control, airport advisory services, weather briefings and aeronautical information services for more than 18 million square kilometres of Canadian domestic and international airspace.
The Company is internationally recognized for its safety record, and technology innovation. Air traffic management systems developed by NAV CANADA are used by air navigation service providers in countries worldwide.
NAV CANADA is a partner of Aireon LLC, an international joint venture deploying a space based Automatic Dependent Surveillance-Broadcast (ADS-B) system that will expand air traffic surveillance to all regions of the globe.
|(1)||A positive balance in the rate stabilization account represents a regulatory credit balance on the Company’s statement of financial position, reflecting amounts returnable to customers through future customer service charges.|
|(2)||Free cash flow is a non-GAAP financial measure used by the Company to enhance the overall understanding of its financial and operating performance. Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines free cash flow as cash generated from operations, less capital expenditures and investments in Aireon LLC and equity related investments. Management places importance on this indicator as it assists in measuring the impact of its investment program on the Company’s financial resources.|
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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 statements.