SAO PAULO: Embraer SA widened its net loss in the first quarter from a year ago but said results came in within management expectations for a seasonally weaker period, reaffirming all its financial and delivery forecasts for the full year.
The planemaker on Thursday reported a quarterly adjusted net loss of $88.9 million, larger than the $75.3 million loss seen a year ago, saying it also burnt more cash in the period as it prepares to increase deliveries in the next quarters. The Brazilian firm had already reported deliveries of 15 aircraft in the period, up 7% on the previous year but well below the 80 jets delivered in the fourth quarter, which tends to be busier for the company.
“We expect higher delivery and sale activities and improved results in coming quarters,” Chief Executive Francisco Gomes Neto told reporters, saying the company has several active sales campaigns and good prospects especially for its commercial aviation and defense units.
Gomes Neto recently participated in official government trips to China and Portugal, with the firm eyeing commercial jet sales to the Asian country and announcing defense partnerships with the latter as part of a broader internationalization bid.
Analysts at JPMorgan said the quarterly results should not be a surprise to investors as operational data was released last week, forecasting a “slightly negative reaction” on soft top line and margins.
“(But) we are buyers on weakness,” they added.
Embraer earlier this year said it expects commercial aircraft deliveries to reach 65 to 70 jets this year, up from 57 in 2022, while executive jet deliveries were seen jumping as much as 27.5% to 120-130.
It reaffirmed the forecast on Thursday, also keeping unchanged full-year financial outlooks that include net revenue growing as much as 27% to $5.2-5.7 billion and free cash flow of $150 million or more.
The firm reported a cash consumption of $399 million in the quarter, larger than the $65.9 million a year ago, due to seasonality and in preparation for higher deliveries ahead.
“We were building inventory to fulfill our production and delivery commitments for the rest of the year,” Chief Financial Officer Antonio Carlos Garcia said, projecting cash to be recovered as deliveries materialize.