April 13, 2012 16:30 ET

NAV CANADA Announces Second Quarter Financial Results

OTTAWA, ONTARIO--(Marketwire - April 13, 2012) - NAV CANADA today released its financial results for the three and six months ended February 29, 2012. The second quarter results show continued success in controlling costs while maintaining safe and efficient air navigation services, as well as growth in air traffic volumes that were up 2.2 per cent from the comparable period in the prior fiscal year.

In the second quarter of fiscal 2012, the Company has achieved positive financial performance as evidenced by an improvement of $12 million in the rate stabilization account, finishing with a positive* balance of $9 million. When adjusted for rate setting purposes, there is a positive* "notional" balance of $92 million in the rate stabilization account, which is equal to its target balance.

"The Company, together with all employees, is on track to achieve its safety and service goals in fiscal 2012 while effectively controlling costs throughout the business," said John Crichton, President & CEO. "Given current trends and our financial and operational performance, we anticipate maintaining service charges at their current levels - which would mean eight consecutive years without a rate increase, including two of those years in which rates were reduced."

The Company's revenues before rate stabilization for the second quarter of fiscal 2012 were $281 million, compared to $271 million in the comparative period for the previous fiscal year.

Operating expenses before rate stabilization for the second quarter were $247 million, which was $11 million higher than in the second quarter of the last fiscal year, primarily due to the negotiated return in 2011 of $11 million of long-term disability premiums from its benefits provider.

Interest, depreciation and amortization expense before rate stabilization totalling $62 million was $2 million lower than in the comparable period in the previous fiscal year.

Positive fair value adjustments in the second quarter contributed $14 million to other income before rate stabilization. As at February 29, 2012, the fair value of the Company's investments in ABCP restructured and non-restructured notes is $216 million on holdings with a face value of $307 million. Of the total fair value variances from face value of $91 million, $83 million is considered recoverable over the term of the notes.

Based on the above, the Company had an excess of expenses over revenues and other income before rate stabilization of $26 million for the quarter. The second quarter normally has the lowest air traffic levels of the fiscal year. Since our costs are predominantly fixed in nature, an excess of expenses over revenues is expected. Excluding rate stabilization adjustments, expenses would have exceeded revenues and other income by $14 million for the quarter.

The Company's Financial Statements and Management's Discussion and Analysis for the three and six months ended February 29, 2012 can be found at:

- Financial Statements

- Management's Discussion and Analysis

Marking 15 years as Canada'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.

Contact Information

  • Michelle Bishop
    Director, Government and Public Affairs
    (613) 563-7520

    Ron Singer
    Manager, Media Relations
    (613) 563-7303
    Media Information Line: 1-888-562-8226