OTTAWA, ONTARIO--(Marketwire - Jan. 11, 2013) - NAV CANADA today released its financial results for the three months ended November 30, 2012. The results show continued success in controlling costs while maintaining safe and efficient air navigation services in a period when air traffic levels were down 1.6 per cent from the same period in the prior year, as airlines continue to constrain capacity growth in order to enhance load factors.
In the first quarter of fiscal 2013, the Company had an excess of revenues and other income over expenses of $3 million and achieved positive financial performance, as evidenced by an improvement of $8 million in its rate stabilization account, finishing with a positive* balance of $39 million. When adjusted for rate setting purposes, there is a positive* "notional" balance of $93 million in the rate stabilization account, which is equal to its target balance.
"Through prudent fiscal management and judicious attention to cost control, we have been able to maintain the rate stabilization account at its target positive notional balance, despite experiencing eight consecutive months of negative traffic growth," said John Crichton, President & CEO. "While the short term economic outlook remains uncertain, we will maintain this strong focus, without compromising on our primary mandate of safety and the need to continue to invest in systems and technology that provide cost savings to our customers and partners in the aviation industry.
"In this regard, in November we made an initial US $15 million investment in Aireon, whose mandate is to provide satellite-based surveillance capability for air navigation service providers around the world. Aireon will deliver this global aircraft surveillance through Automatic Dependent Surveillance-Broadcast (ADS-B) receivers built as an additional payload on Iridium NEXT, the second generation satellite constellation to be launched by Iridium in the 2015-2017 period."
The Company's revenues before rate stabilization for first quarter of fiscal 2013 were $301 million, compared to $305 million in the previous fiscal year due to a decline in air traffic volumes.
Operating expenses before rate stabilization for the first quarter of fiscal 2013 were $238 million as compared to $241 over the same period in fiscal 2012. Management continues to successfully manage its costs, largely offsetting higher compensation levels, benefit costs and inflationary increases.
Interest, depreciation and amortization expense before rate stabilization totalling $60 million was $2 million lower than in the comparable period in the previous fiscal year.
Positive fair value adjustments in the first quarter contributed $7 million to other income before rate stabilization. As at November 30, 2012, the fair value of the Company's investments in ABCP restructured and non-restructured notes is $245 million on holdings with a face value of $307 million. Of the total fair value variances from face value of $62 million, $54 million is considered recoverable over the term of the notes.
Based on the above, the Company had an excess of revenue and other income over expenses before rate stabilization of $11 million for the quarter.
The Company's Financial Statements, Management's Discussion and Analysis for the three months ended November 30, 2012 can be found at:
- Financial Statements
- Management's Discussion and Analysis
NAV CANADA, is the country's private sector civil air navigation services provider. With operations from coast to coast to coast, NAV CANADA provides air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation.
* A positive/negative balance in the rate stabilization account represents a liability/asset on the Company's consolidated balance sheet, reflecting amounts returnable to/recoverable from customers through future customer service charges.
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.