Bombardier reports 2Q loss as IFC cuts CS300 order

For the three months ended 30 June 2016 (2Q16), Bombardier’s commercial aircraft business recorded revenues of $764 million, a 27% increase on the $598 million reported for 2Q15.
EBIT and EBITDA margins for commercial aircraft in 2Q16 were –76.7% and –11.8%, respectively, (compared with –1.7% and 2.3% in 2Q15), with EBIT and EBITDA for the quarter being –$586 million and –$90 million respectively, versus –$10million and $14 million in 2Q15.
Throughout the quarter, Bombardier delivered 27 aircraft versus the 19 aircraft delivered during the same period the previous year.
In 2Q16, the OEM signed a firm order for 10 CRJ900 aircraft with an undisclosed customer, valued at $472 million based on list price, as well as restructuring a purchase agreement signed with Ilyushin Finance Co. (IFC) in 2013. The firm order has been modified from 32 CS300 aircraft and options for an additional 10 CS300 aircraft to 20 CS300s and one Q400 with options for five additional Q400s.
“We continue to make very good progress executing our turnaround plan,” stated Alain Bellemare, president and CEO, Bombardier Inc. “We delivered on our financial commitments, achieved our programme milestones and positioned Bombardier to meet both our full year guidance and 2020 goals.
“Highlighting the company’s recent progress is the C Series entry-into-service and the certification of the CS300 aircraft – the larger version of the C Series. These significant milestones reflect the completion of the C Series development phase and transition into production ramp-up.
“This was a pivotal quarter for the C Series as both variants are now certified and the programme has begun generating revenue,” Bellemare continued. “Having firmly placed Bombardier on a path to profitable earnings growth and cash generation, we remain focused on delivering customer and shareholder value by improving productivity, executing flawlessly on our programmes and applying a disciplined and proactive approach to our portfolio.”
So far this year, the C Series has won 127 firm orders and 80 options from Delta, Air Canada and airBaltic, valued at $9.9 billion based on list prices. The programme entered into service with a firm order backlog above its target of 300 aircraft.
On 30 June 2016, Bombardier closed the $1 billion investment by the Government of Québec (through Investissement Québec) in return for a 49.5% equity stake in a newly created limited partnership, the C Series Aircraft Limited Partnership (CSALP).
The OEM logged free cash flow usage of approximately $470 million on a year-to-date basis, claiming it is on track to meet the full year target of $1 billion.

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