NAV CANADA announces year-end financial results
(Ottawa, October 24, 2019) – NAV CANADA today released its financial results for the year ended August 31, 2019.
In fiscal 2019, the Company saw air traffic growth of 1.9% on a year over year basis as measured in weighted charging units. The Company’s revenue for fiscal 2019 was $1,437 million, compared to $1,415 million in fiscal 2018, and reflected a base rate reduction that effectively continued the average decrease of 0.4% in service charges first implemented in fiscal 2018 as a temporary reduction.
Operating expenses for fiscal 2019 were $1,449 million as compared to $1,396 million in fiscal 2018, mainly due to higher compensation costs.
Fiscal 2019 saw NAV CANADA mark a significant technological achievement with the introduction of space-based ADS-B surveillance in Canadian controlled air space. The new technology is widely acknowledged as a game changer in how air space is surveilled worldwide. “We were delighted to be the recent recipients together with Aireon LLC, and our United Kingdom colleagues NATS, of the ATCA Annual Industry Award in 2019 for the successful deployment of space-based surveillance technology over the North Atlantic Ocean. The surveillance system allows us to improve safety on the North Atlantic, which is one of the busiest airspaces in the world” said Neil Wilson, President and CEO. This Award honours groups for achievement or contribution adding to the quality, safety, or efficiency of air traffic control.
At the end of fiscal 2019, net other income and expenses were an expense of $91 million as compared to an expense of $60 million in fiscal 2018, primarily due to positive fair value adjustments on our investment in Aireon LLC in the third quarter of fiscal 2018.
The Company had a net loss (before net movement in regulatory deferral accounts including rate stabilization) of $100 million in fiscal 2019 as compared to a net loss of $33 million in fiscal 2018. As a result of the decline in the budgeted air traffic growth experienced in the fiscal year, the rate stabilization account declined to $93 million at the end of the fiscal 2019.
As at August 31, 2019, the Company held cash of $30 million and had positive free cash flow(1) of $10 million mainly due to cash flows from operations that exceeded capital expenditures.
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 2019 was an income of $100 million as compared to an income of $33 million in fiscal 2018. This change in regulatory deferrals in fiscal 2019 is due to deferrals of higher unfavourable results through rate stabilization adjustments of $24 million and a $43 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.
On August 15, 2019, the Company issued a notice of revised service charges providing details of rate revisions. The changes will be implemented in two phases, taking effect on September 1, 2019 and January 1, 2020 respectively. These rate revisions are currently the subject of an appeal, pursuant to the Civil Air Navigation Services Commercialization Act.
The Company’s Financial Statements, Management's Discussion and Analysis and Annual Information Form for the year ended August 31, 2019 can be found at:
• Financial Statements
• Management’s Discussion and Analysis
• Annual Information Form
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.
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 equity related investments. 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:
Senior Manager, Public Affairs
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.