NAV CANADA announces year-end financial results
(Ottawa, October 25, 2018) – 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.
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.
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.”
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.
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.
Financial Statements, Management's Discussion and Analysis and Annual
Information Form for the year ended August 31, 2018 can be found at:
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
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.
- 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.
- 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
For further information, please contact:
National Manager, Media Relations
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