January 11, 2023
NAV CANADA today released its financial results for the three months ended November 30, 2022.
In the first quarter of fiscal 2023, the Company saw air traffic levels, as measured in weighted charging units(1), increase 30.7% on a year over year basis. In comparison to pre-pandemic levels in fiscal 2019 however, weighted charging units were 8.7% lower. The Company’s revenue for the first quarter of fiscal 2023 was $435 million, compared to $345 million over the same period in fiscal 2022.
The Company had positive free cash flow(2) of $127 million in the first quarter of fiscal 2023 as compared to $18 million in the same period in fiscal 2022. During the quarter, the Company repurchased $119 million of its General Obligation Notes and Revenue Bonds, ending the quarter with a cash balance of $395 million.
“The recent growth in air traffic levels enabled early repayment of a portion of the Company’s long-term debt. It is important for NAV CANADA to reduce its debt level to allow for capacity to borrow in the future,” said Raymond G. Bohn, President and CEO.
Operating expenses for the first quarter of fiscal 2023 were $348 million as compared to $337 million over the same period in fiscal 2022.
“As we continue to support the aviation industry in moving towards a sustained recovery, NAV CANADA is focused on working with our partners to address industry challenges. It is critical that we maintain NAV CANADA’s momentum of strategic investment to increase capacity, enhance safety and efficiency and manage system costs,” said Raymond G. Bohn.
Net other income and expenses for the first quarter of fiscal 2023 were a net expense of $26 million as compared to a net expense of $24 million over the same period in fiscal 2022.
The Company had a net income (before net movement in regulatory deferral accounts including rate stabilization) of $61 million in the first quarter of fiscal 2023 as compared to a net loss of $16 million for the first quarter of fiscal 2022.
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 first quarter of fiscal 2023 was an expense of $71 million as compared to an expense of $41 million over the same period in fiscal 2022. This change in regulatory deferrals is primarily due to an increase in favourable rate stabilization adjustments of $19 million and an $11 million net decrease in adjustments required to align the accounting recognition of certain transactions to the periods in which they will be considered for rate setting. As at November 30, 2022, the rate stabilization account had a balance of $496 million to be recovered from customers through future customer service charges.
The Company’s Financial Statements and Management's Discussion and Analysis for the three months ended November 30, 2022 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.
(1) Weighted charging units represent a traffic measure that reflects the number of billable flights, aircraft size and distance flown in Canadian airspace and is the basis for movement-based service charges, which comprise the vast majority of the Company’s revenue.
(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, investments in Aireon LLC and equity related investments and principal payment of lease liabilities. Management places importance on this indicator as it assists in measuring the impact of its investment program on the Company’s financial resources.
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.