July 12, 2019
NAV CANADA today released its financial results for the three and nine months ended May 31, 2019.
In the third quarter of fiscal 2019, NAV CANADA’s financial performance was in line with expectations. The Company had negative free cash flow of $19 million in the third quarter of fiscal 2019 primarily due to capital spending and the seasonality of air traffic revenue, ending the quarter with cash of $22 million.
The Company’s revenue for the third quarter of fiscal 2019 was $351 million, compared to $349 million over the same period in fiscal 2018, mainly due to a 1.0 percent growth in air traffic volumes.
On June 4, 2019, the Company issued a notice of revised service charges for consultation providing details of proposed rate revisions. The proposed changes would be implemented in two phases, taking effect on September 1, 2019 and January 1, 2020 respectively. The consultation period concludes on August 6, 2019.
“We retired the general obligation notes which matured on April 17th from the proceeds of our successful 31.5 year bond issue for $250 million in March.” said Neil Wilson, President and CEO. “We were also delighted to be the recent recipients together with Aireon LLC, and our United Kingdom colleagues NATS, of the Civil Air Navigation Services Organization’s inaugural award of excellence in 2019 for the successful implementation of space based surveillance technology. Described as a “game changer” the technology provides 100% surveillance for the North Atlantic making flying safer on one of the busiest ocean air spaces in the world.”
Operating expenses for the third quarter of fiscal 2019 were $367 million as compared to $361 million over the same period in fiscal 2018, mainly due to higher compensation costs.
Net other income and expenses for the third quarter of fiscal 2019 was a net expense of $15 million as compared to a net income of $14 million over the same period 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 $31 million in the third quarter of fiscal 2019 as compared to a net loss of $8 million for the third quarter of fiscal 2018.
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 2019 was income of $17 million as compared to income of $nil over the same period in fiscal 2018. This change in regulatory deferrals is due to deferrals of lower favourable results through rate stabilization adjustments of $2 million offset by a $19 million net increase in regulatory deferral adjustments to reflect certain transactions in 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 and nine months ended May 31, 2019 can be found at: