NAV CANADA announces year-end financial results
OTTAWA, Oct. 25, 2018 (GLOBE NEWSWIRE) -- NAV CANADA today released its financial results for the year ended August 31, 2018.
As at August 31, 2018, financial performance as evidenced by its positive(1) rate stabilization account balance of $124 million was in line with expected results and reflected a planned reduction of $10 million from August 31, 2017. The Company had negative free cash flow(2) of $86 million mainly due to increased capital expenditures. The Company also reduced debt by $100 million ending the fiscal year with a cash balance of $38 million.
The Company’s revenue for fiscal 2018 was $1,415 million, compared to $1,291 million in fiscal 2017, mainly due to a 5.1 per cent growth in air traffic volumes and a $60 million one-time refund of customer service charges revenue in fiscal 2017.
On August 7, 2018, the Company issued an announcement detailing the implementation of revised customer service charges for fiscal 2019. Strong traffic results in fiscal 2018 along with traffic growth projections for fiscal 2019 enabled the Company to implement revised customer service charges, whereby existing base rates decreased by an average of 0.4 per cent on September 1, 2018. This effectively continues the one-year temporary rate reduction implemented on September 1, 2017.
“Fiscal 2018 marks the fifth consecutive year of air traffic growth,” said Neil Wilson, President and CEO. “This positive growth has allowed us to continue to invest in our people, technology and infrastructure and to return value to our customers through a further base rate reduction which will mean our customers will see their service charges remain unchanged on average in fiscal 2019. We also continue to plan for the future with a go live of space-based ADS-B surveillance in calendar 2019. We have already demonstrated the potential of the new surveillance system in assisting search and rescue coordination in locating missing aircraft in Canada.”
Operating expenses for fiscal 2018 were $1,396 million as compared to $1,330 million in fiscal 2017, mainly due to higher compensation levels and overtime costs.
Net other income and expenses for fiscal 2018 were an expense of $60 million as compared to an expense of $97 million in fiscal 2017, primarily due to higher positive fair value adjustments on the investment in preferred interests of Aireon LLC, lower interest expense, and foreign exchange gains partially offset by positive fair value adjustments on ABCP investments held in fiscal 2017.
The Company had a net loss (before net movement in regulatory deferral accounts including rate stabilization) of $33 million in fiscal 2018 as compared to a net loss of $150 million in 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 fiscal 2018 was an income of $33 million as compared to an income of $150 million in fiscal 2017. This change in regulatory deferrals is due to lower deferrals of favourable results through rate stabilization adjustments of $31 million and a $86 million net decrease in regulatory deferral adjustments to adjust the accounting recognition of certain transactions to the periods in which they will be considered for rate setting.
The Company’s Financial Statements, Management's Discussion and Analysis and Annual Information Form for the year ended August 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 other subsidiaries. Management places importance on this indicator as it assists in measuring the impact of its investment program on the Company’s financial resources. |
For further information, please contact:
Ron Singer
National Manager, Media Relations
(613) 563-7303
Media Information Line: 1-888-562-8226
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.
