Embraer’s 2Q16 results show increasing losses

During the second quarter of 2016 (2Q16), Embraer delivered 26 commercial and 26 executive jets, with lower deliveries in both segments in comparison with 2Q15 resulting in a net loss of $99.4 million.

The adjusted net loss, which excludes non-cash deferred income taxes and social contribution largely related to foreign exchange variation on non-monetary assets, was $44.1 million in 2Q16.
Embraer’s firm order backlog at the end of the quarter remained the same as it was during 1Q16, $21.9 billion, compared with $22.9 billion at the end of 2Q15. The commercial aircraft deliveries during 2Q16 comprised 21 E175s, four E190s and one E195.
The lesser number of executive and commercial aircraft deliveries led to 2Q16 revenues of $1,366.4 million, representing a decline of 9.7% from the same period the previous year. The commercial aviation segment represented 62.8% of consolidated revenues in 2Q16, up from the 58.3% in 2Q15, despite a year-over-year decline of 2.9% in revenues.
Overall EBIT and EBITDA margins for 2Q16 were –9.3% and –3.5%, respectively, (compared with 6.8% and 11.7% in 2Q15), with EBIT and EBITDA for the quarter being –$127.4 million and –$47.7 million respectively, versus $102.2 million and $177.6 million in 1Q15.
In 2Q16, Embraer booked a $200 million loss contingency in Other operating income (expense), net related to the allegations of non-compliance with the US Foreign Corrupt Practices Act.
In the segment of commercial jets with 70 to 130 seats, Embraer still claims leadership with more than 50% of the sales and 60% of the deliveries on the world market.

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