July 7, 2023
NAV CANADA today released its financial results for the three and nine months ended May 31, 2023.
In the third quarter of fiscal 2023, the Company saw air traffic levels, as measured in weighted charging units(1), increase 16.1% on a year over year basis. In comparison to pre-pandemic levels in fiscal 2019 however, weighted charging units were 6.3% lower. The Company’s revenue for the third quarter of fiscal 2023 was $436 million, compared to $381 million over the same period in fiscal 2022.
“Our people are laying the foundation for long-term success, whether it be through the upcoming design and implementation of advanced technologies or bringing our engagement with stakeholders to new levels. The commitment shown every day by our front-line air traffic services personnel ensures we continue to deliver the highest levels of safety,” said Raymond G. Bohn, President and CEO. “In addition, NAV CANADA and the Canadian Air Traffic Control Association have reached a new five-year collective agreement that will provide stability for the Company and air traffic controllers, while supporting efforts to increase resiliency and prepare for the future.”
The Company had positive free cash flow(2) of $32 million in the third quarter of fiscal 2023 as compared to negative free cash flow of $21 million in the same period in fiscal 2022. The positive free cash flow in the current period is attributable to operating cash inflows exceeding capital expenditures. The Company ended the quarter with a cash balance of $428 million.
Operating expenses for the third quarter of fiscal 2023 were $386 million as compared to $361 million over the same period in fiscal 2022 primarily as a result of higher compensation costs.
Net other income and expenses for the third quarter of fiscal 2023 were a net expense of $24 million as compared to a net expense of $28 million over the same period in fiscal 2022.
The Company had net income (before net movement in regulatory deferral accounts including rate stabilization) of $26 million in the third quarter of fiscal 2023 as compared to a net loss of $8 million for the third 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 third quarter of fiscal 2023 was an expense of $39 million as compared to income of $3 million over the same period in fiscal 2022. This change in regulatory deferrals is primarily due to favourable rate stabilization adjustments of $48 million in the third quarter of fiscal 2023 as compared to $20 million for the same period in fiscal 2022, along with a $14 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 May 31, 2023, the rate stabilization account had a balance of $414 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 and nine months ended May 31, 2023 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 (net of government grants received), investments in regulatory assets, investments in Aireon LLC and equity related investments and principal payments 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.