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Bombardier Inc
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Close 2021-10-27 C$ 2.11
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Bombardier loses $377-million (U.S.) in Q3

2021-10-28 06:31 ET - News Release

Mr. Eric Martel reports


Bombardier Inc. has released its financial results for the third quarter of 2021. The company is pleased with continued execution on its strategic initiatives, cash flow generation and order momentum driving the financial results of the quarter. Bombardier also highlighted that during the third quarter, the company redeemed debt maturities through December, 2024, a major milestone in its deleveraging plan. All amounts in this press release are in U.S. dollars unless otherwise indicated.

"The Bombardier team once again delivered a solid quarter, a confirmation that this year is shaping up to be significantly better than the last," said Eric Martel, president and chief executive officer, Bombardier. "Our unit book-to-bill ratio remains very healthy, contributing to a significant increase to our backlog. This momentum has also translated to a solid increase in profitability, with adjusted EBITDA margin approaching 10 per cent this quarter.

"We are delivering consistently on what we set out to do, especially when it comes to deleveraging the balance sheet. Thanks to the hard work of our outstanding team, we cleared the debt maturity runway on plan," added Mr. Martel. "As a fantastic finale to the quarter and at a great moment in time for our industry, we launched our new Challenger 3500 jet last month. The extremely positive reception and strong first orders for the new aircraft are clear evidence that we were able to bring significant value to customers through measured and disciplined investments."

Third quarter 2021 financial performance

Business jet revenues of $1.4-billion are up 17 per cent year over year, propelled mainly by an improved delivery mix, with higher deliveries of large aircraft. The company has also seen an increase of revenues by $76-million from business aircraft services. This is mainly due to increased fleet flight hours having now surpassed 2019 levels, a clear signal that the industry is on a strong recovery path from the global shock caused by the COVID-19 pandemic. Confidence levels within the industry are at a new all-time high, indicative of the rising vaccination levels and eased travel restrictions. In the United States, business jet utilization increased by 42.5 per cent year over year for the first eight months of the year. In Europe, business jet utilization increased by 27.1 per cent year over year in the first nine months of the year.

Bombardier reported an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $142-million, representing a year-over-year improvement of $58-million or 69 per cent. The company attributes this to an improved aircraft mix, continued progress on Global 7500 aircraft learning curve, and cost structure improvements. Reported EBIT (earnings before interest and tax) from continuing operations for the quarter was $48-million.

For the second consecutive quarter, the company is seeing an improved free cash flow (FCF) generation. FCF of $100-million from continuing operations represents an improvement of $747-million year over year. The positive result is mainly due to stronger order intake and better payment terms on new orders. Reported cash flows from operating activities -- continuing operations for the quarter was $156-million, and net additions to PP&E and intangible assets -- continuing operations for the quarter were $56-million.

Major milestone achieved with the clearing of debt maturities through December, 2024

The corporation reported a total debt reduction of approximately $3-billion since the beginning of 2021, and cleared, through redemption or refinancing, debt maturities through December, 2024. This represents a major milestone in one of Bombardier's key priorities this year, as it creates a runway to focus on its operations and stabilizes the need for liquidity. Pro forma liquidity remains strong at $1.9-billion.

Successful launch of the Challenger 3500

As the third quarter wrapped up, the company introduced a major update to its bestselling Challenger 350 platform, the Challenger 3500. The new aircraft represents a culmination of a period of important product development that saw Bombardier introduce innovative technologies and industry-leading new products and services.

With a redesigned interior that includes Bombardier's patented Nuage seat as part of the aircraft's standard configuration and the industry's first voice-controlled cabin, the new Challenger 3500 further elevates the cabin experience to meet the increasing customer expectations. The enthusiastic welcome that the mock-up of the aircraft received at the first postpandemic National Business Aviation Association event earlier this month is a first confirmation of this, as is a 20-aircraft firm order announced in the third quarter.

Flight testing and certification activities for the Challenger 3500 is progressing on schedule for an expected entry into service in the second half of 2022.

                                           SELECTED RESULTS                                                                                        
                                            (in millions)
                                                                    Three-month periods ended Sept. 30
                                                                           2021                   2020

Revenues                                                                 $1,449                 $1,405
Adjusted EBITDA                                                             142                     84
Adjusted EBITDA margin (%)                                                  9.8                    6.0
Adjusted EBIT (loss)                                                         49                    (11)
Adjusted EBIT margin (loss) (%)                                             3.4                   (0.8)
EBIT (loss)                                                                  48                    (29)
EBIT margin (loss) (%)                                                      3.3                   (2.1)
Net (loss) from continuing operations                                      (376)                   (24)
Net income (loss) from discontinued operations                               (1)                   216
Net income (loss)                                                          (377)                   192
Diluted EPS (loss) from continuing operations (in dollars)                (0.16)                 (0.01)
Diluted EPS (loss) from discontinued operations (in dollars)                  -                   0.06
                                                                          (0.16)                  0.05
Adjusted net (loss)                                                         (95)                  (210)
Adjusted EPS (loss) (in dollars)                                          (0.04)                 (0.09)
Cash flows from operating activities
Continuing operations (loss)                                                156                   (611)
Discontinued operations (loss)                                                -                    (33)
                                                                            156                   (644)
Net additions to PP&E and intangible assets
Continuing operations                                                        56                     36
Discontinued operations                                                       -                     26
                                                                             56                     62
Free cash flow (usage)
Continuing operations (usage)                                               100                   (647)
Discontinued operations (usage)                                               -                    (59)
                                                                            100                   (706)

As at                                                            Sept. 30, 2021          Dec. 31, 2020

Cash and cash equivalents excluding transportation                       $1,380                 $1,779
Cash and cash equivalents from transportation                                 -                    671
                                                                          1,380                  2,450
Available short-term capital resources                                    1,380                  3,203
Aviation order backlog (in billions of dollars)
Business aircraft                                                          11.2                   10.7

About Bombardier Inc.

Bombardier is a global leader in aviation, creating innovative and game-changing planes. The company's products and services provide world-class experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.

Headquartered in Montreal, Canada, Bombardier is present in more than 12 countries including its production/engineering sites and its customer support network. The corporation supports a worldwide fleet of more than 4,900 aircraft in service with a wide variety of multinational corporations, charter and fractional ownership providers, governments, and private individuals.

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