NAV CANADA announces
first quarter financial results
(Ottawa, January 12, 2017) – NAV CANADA today released its financial results for the three months ended November 30, 2016. The results reflect growth in air traffic volumes as measured by weighted charging units of 5.5 per cent over the same period in the prior fiscal year and demonstrate the Company’s continued success in controlling costs and making strategic investments in its core services while maintaining safe and efficient air navigation.
The Company’s fiscal year runs from September 1 to August 31. In the first quarter of fiscal 2017, the Company had cash of $224 million, a positive free cash flow(1) of $24 million and demonstrated a strong financial performance as evidenced by its rate stabilization account, which finished the quarter with a positive(2) balance of $176 million. When adjusted for rate setting purposes, the rate stabilization account has a positive(2) “notional” balance of $179 million which is above its target balance of $101 million.
revenue for the first quarter of fiscal 2017 was $332 million, compared to $342
the same period in fiscal 2016, mainly due to the lower revised
service charges (7.6% on average) that became effective September 1, 2016
partially offset by a 5.5% growth in air traffic volumes.
“Strong traffic growth continued into
the first quarter of fiscal 2017,” said Neil Wilson President & CEO. “The
reduction in revenues as a result of the lowering of our customer service
charges at the beginning of the fiscal year was foreseen and planned for to
achieve balance between revenues and expenses.”
Operating expenses for the first quarter
of fiscal 2017 were $321 million as compared to $296 million over the same
period in fiscal 2016, mainly due to higher
income and expenses for the first quarter of fiscal 2017 were an expense of $22
million as compared to an expense of $30 million over the same period in fiscal
2016, primarily due to higher positive fair value
adjustments on ABCP investments and higher foreign exchange gains, partially
offset by higher interest expense mainly related to the early redemption
premium of the MTN 2009-1 General Obligation Notes. During the first quarter of
fiscal 2017 the Company received $80 million in proceeds from its ABCP
investments. The early partial redemption of our series MTN 2009-1 General
Obligation Notes was financed out of proceeds from the ABCP investments along
with surplus cash.
The Company had a net loss (before net
movement in regulatory deferral accounts including rate
stabilization) of $12 million in the first quarter of fiscal 2017 as compared
to a net income of $16 million for the first quarter of fiscal 2016.
The Company is
subject to legislation that regulates the level of its 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 first quarter of fiscal 2017 was an income
of $12 million as compared to a loss of $18 million over the same
period in fiscal 2016. This change in regulatory
deferrals of $30 million as compared to the same period in fiscal 2016 is due
to lower deferrals of favourable results through rate stabilization adjustments
of $14 million and a $16 million net increase 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 and Management's
Discussion and Analysis for the three months ended November 30, 2016 can be
(1) 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.
(2) 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.
For further information, please contact:
Director, Government and Public Affairs
National Manager, Media Relations
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.