Embraer has reported significant growth in its third-quarter earnings with a robust increase in jet deliveries and a record-high order backlog. The company saw a 30% surge in the delivery of jets compared to the third quarter of the previous year, handing over 43 aircraft, including 15 commercial and 28 executive jets.
In the face of fluctuating global markets, the Brazilian aircraft manufacturer has kept a steady pace, displaying a 33% increase in year-to-date deliveries. Revenue streams have been strong across all sectors, with commercial aviation seeing a substantial 68% year-over-year revenue increase contributing to overall quarterly revenues of US$ 1.284 billion—a 38% boost from the same period last year.
Adjusted EBIT for Embraer improved to 7.8% up from 5.4% in the previous year’s quarter, underlined by the higher volume of deliveries. The company’s firm order backlog, a critical indicator of future revenue, closed the quarter at an impressive US$ 17.8 billion, marking the highest level in a year. The company’s commercial aviation backlog alone rose to US$ 8.6 billion.
The company has also successfully completed a Liability Management exercise, effectively extending the average loan maturity to 4.8 years, with a current net debt position standing at US$ 1,357.3 million, indicating a robust financial structure.
Regarding net income, Embraer reported US$ 61.0 million attributable to shareholders for the third quarter, turning around a net loss from the previous year and underscoring the company’s profit trajectory.
The Commercial Aviation segment of Embraer was buoyed by a string of new orders and milestones, including the E195-E2 jet’s entry into the Chinese market following its type certification from the Civil Aviation Administration of China (CAAC). Noteworthy deals such as SkyWest’s order of 19 new E175 jets and Air Peace’s firm order for five E175 jets have fortified Embraer’s commercial aviation presence.
On the defense front, Embraer’s aircraft have been selected by several European nations, evidencing the brand’s growing footprint in NATO countries. The KC-390 Millennium aircraft continues to demonstrate high operational availability, boasting over 10,000 flight hours with the Brazilian Air Force.
Embraer’s Executive Jets division remains strong, with new model announcements and sustainable fuel testing placing it at the forefront of innovation and environmental stewardship in the sector.
The Services & Support unit showed continuous growth, with the highest recorded quarterly backlog at US$ 2.8 billion. New contracts and extensions, such as the Integrated Logistical Support contract for the Brazilian Air Force, exhibit Embraer’s expanding service capabilities.
Capital expenditures for the quarter amounted to US$ 55.2 million, dedicated to expanding services training and maintenance capacities. Additionally, Embraer has moved to capitalize on the development costs of its EVE urban air mobility project, aligning with the program’s maturity.
Looking ahead, Embraer remains confident with its unchanged operational and financial guidance for the year. The company expects continued strong cash generation in the fourth quarter, bolstered by higher anticipated deliveries.
Document: Embraer’s Full 3Q2023 Earnings Results
