(Ottawa, July 12, 2018) – NAV
CANADA today released its financial results for the three and nine months ended
May 31, 2018.
In the third quarter of fiscal 2018, financial performance as evidenced by its positive(1)
rate stabilization account balance of $122 million
was in line with expected results and reflected a planned reduction of $7
million from August 31, 2017. The Company had negative free cash flow(2)
of $30 million primarily due to increased capital spending ending the quarter
with cash of $28 million.
The Company’s revenue for the third quarter of fiscal 2018 was $349
million, compared to $332 million over the same period in fiscal 2017,
mainly due to a year-to-date 5.3 per cent growth in air traffic volumes. In March 2018, we successfully refinanced our $350
million general obligations notes which matured in April 2018.
The Company issued a notice of revised
service charges for consultation on May 28, 2018, providing details of the
proposed rate revisions. The consultation period concludes on July 31, 2018.
“We recently announced a rate revision proposal
that would see us decrease rates charged to our customers by an average of 0.4
per cent effective September 2018. This will effectively enable us to continue
rates at the same level they were this year, by adjusting base rates by an
amount equivalent to the one-year temporary reduction that was implemented on September
1, 2017” said Neil Wilson, President and CEO.
“Our positive financial performance has allowed
us to make transformational investments in technology and systems which provide
enhanced levels of safety for our customers while enabling improved efficiencies.
We are excited to be trialing space-based surveillance technology in our air
traffic control operations for both domestic and North Atlantic oceanic
airspace in fiscal 2019” added Wilson.
expenses for the third quarter of fiscal 2018 were $361 million
as compared to $348 million over the same period in fiscal 2017, mainly due to
higher compensation costs.
Net other income and expenses for the
third quarter of fiscal 2018 were a net income of $14 million as compared to a
net expense of $16 million over the same period in fiscal 2017,
primarily due to positive fair value adjustments on our investment in Aireon in
the third quarter of fiscal 2018.
Company had a net loss (before net movement in regulatory deferral
accounts including rate
stabilization) of $8 million in the third quarter of fiscal
2018 as compared to a net loss of $35 million for the third quarter of fiscal
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 the third quarter of fiscal 2018 was $nil as compared to
income of $27 million over
the same period in fiscal 2017. This change in regulatory
deferrals is due to higher deferrals of favourable results through rate
stabilization adjustments of $11 million offset by a $38 million net decrease
in regulatory deferral adjustments to reflect certain transactions in the
periods in which they will be considered for rate setting.