Bombardier sees profit in Q4 as demand for business jets soars

A Bombardier plant is seen in Montreal on Friday, June 5, 2020. Paul Chiasson/The Canadian Press

Bombardier Inc. swung to a profit in its latest quarter as the business jet maker ramped up production throughout 2021, with plans to churn out a higher number of aircraft this year amid greater global demand.

The Montreal-based company also achieved its first full year of positive free cash flow since 2010 as full-year business jet revenue rose seven per cent year to US$6 billion in 2021.

In line with expectations, deliveries dipped to 38 in its fourth quarter from 44 a year earlier due to a more even distribution of the Global 7500 throughout the year, Bombardier said, resulting in a 25 per cent year-over-year drop in revenue for the three months ended Dec. 31.

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Its guidance aims to raise revenue from business jets to US$6.5 billion this year, driven by delivery of more than 120 aircraft. Bombardier hopes to send off between 138 and 144 Global and Challenger series planes in 2023.

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The company also boosted its backlog to US$12.2 billion, up by US$1.5 billion from a year earlier.

“The increased and more balanced backlog is the result of an increased demand, which, combined with healthy pricing, is giving us the predictability and resilience at exactly the right time,” chief executive Eric Martel said.

While the commercial aviation market struggled amid the COVID-19 pandemic, use of business jets rose by 42 per cent in the United States and 33 per cent in Europe in 2021, according to the U.S. Federal Aviation Administration and Eurocontrol.

The heightened activity helped grow Bombardier’s service revenue by 44 per cent last quarter versus a year earlier, with nearly 5,000 of the company’s business jets now plying the skies.

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The company aims to grow capacity this year, expanding service centres in Singapore and the London area and new facilities in Miami and Melbourne following construction of service and maintenance stations in Berlin, the U.S. and Dubai last year.

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The company, which keeps its books in U.S. dollars, said Thursday it earned net income of US$238 million or nine cents per diluted share for the quarter compared with a net loss of US$337 million or 18 cents per diluted share in the last three months of 2020.

Revenue for the company’s fourth quarter totalled US$1.77 billion, down from US$2.34 billion in the fourth quarter of 2020.

On an adjusted basis, Bombardier said it earned three cents per share in its latest quarter compared with an adjusted loss of 20 cents per share a year earlier.

Adjusted earnings before interest, taxes, depreciation and amortization for this year are expected to be more than US$825 million, a 29 per cent improvement over 2021.

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