OTTAWA, ON, July 8, 2022 /CNW/ – NAV CANADA today released its financial results for the three and nine months ended May 31, 2022.
In the third quarter of fiscal 2022, the Company saw air traffic levels, as measured in weighted charging units, increase 95.3% on a year over year basis. The Company’s revenue for the third quarter of fiscal 2022 was $381 million, compared to $196 million over the same period in fiscal 2021. However, in comparison to the same period in fiscal 2019 (prior to the COVID-19 pandemic), weighted charging units were 19.4% lower.
The Company had negative free cash flow of $21 million in the third quarter of fiscal 2022 as compared to negative free cash flow of $140 million for the same period in fiscal 2021. The negative free cash flow is attributable to capital expenditures exceeding operating cash inflows. The Company ended the quarter with a cash balance of $321 million.
“During the third quarter, NAV CANADA was focused on meeting service delivery demands as air traffic levels continued to increase while progressing on our strategic plan to improve the Company’s resilience and provide longer-term value for stakeholders. A key component of our strategic plan is consideration of our employees and collaborating closely with partners, customers and other key stakeholders,” said Raymond G. Bohn, President and CEO.
Operating expenses for the third quarter of fiscal 2022 were $361 million as compared to $305 million over the same period in fiscal 2021. The increase is largely due to the end of the Canada Emergency Wage Subsidy program in addition to an increase in overtime costs as traffic levels recover.
Net other income and expenses for the third quarter of fiscal 2022 were a net expense of $28 million as compared to a net expense of $86 million over the same period in fiscal 2021. During the third quarter of fiscal 2021, the Company recorded a $36 million (U.S. $30 million) non-cash reduction to the fair value of its investment in preferred interests of Aireon LLC (Aireon). Lower foreign exchange losses in the third quarter of fiscal 2022 primarily related to the Company’s investment in Aireon also led to the decrease in net expense.
The Company had a net loss (before net movement in regulatory deferral accounts including rate stabilization) of $8 million in the third quarter of fiscal 2022 as compared to a net loss of $186 million for the third quarter of fiscal 2021.
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 2022 was income of $3 million as compared to income of $194 million over the same period in fiscal 2021. This change in regulatory deferrals is primarily due to favourable rate stabilization adjustments of $20 million in the third quarter of fiscal 2022 as compared to unfavourable adjustments of $119 million for the same period in fiscal 2021, along with a net decrease of $52 million in adjustments to align the accounting recognition of certain transactions to the periods in which they will be considered for rate setting.
Associated Links
The Company’s Financial Statements and Management’s Discussion and Analysis for the three and nine months ended May 31, 2022 can be found at:
Financial Statements
Management’s Discussion and Analysis
About NAV CANADA
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 has been internationally recognized for its safety record and technology innovation. Air traffic management systems developed by NAV CANADA are used by air navigation service providers in countries worldwide.