Bombardier: House in order(s) after ‘strong’ second quarter
Bombardier reported a loss of US$129 million for its second quarter, but saw significant increases to free cashflow, its backlog and its services revenue. It company made a profit of $139m in the same quarter of last year.
Bombardier delivered 28 aircraft in the second quarter (Q2), one fewer than Q2 2021 revenues were up 5% on last year. The 2021 figures include the last Learjet deliveries.
The Canadian firm’s backlog has continued to grow reaching $14.7bn — a rise of 37% year-over-year (YoY).
The results come on the back of continued “steady demand for new aircraft, strong aftermarket performance, robust free cash flow generation, and one of the industry’s highest backlogs”, said Bombardier. The firm has also raised its full-year guidance on free cash flow.
“It’s been a fantastic second quarter for us – strong demand for business jets has carried through and our team has converted opportunities to grow our backlog significantly,” said Éric Martel, President and Chief Executive Officer. “Our performance on free cash flow has demonstrated that we have set the right foundation to be cash positive and deliver on our commitments. We have also strengthened our balance sheet to further enhance our resilience and predictability.”
Bombardier’s unit book-to-bill ratio of 1.8 for Q2 and a 22% YoY aftermarket revenue increase to $359m. Margin expansion continued, reaching an adjusted EBITDA of $201m — a 41% increase YoY.
The company is revising its original 2022 free cash flow guidance to above $515m, it had been above $50 million, due to better working capital performance and higher interest cost savings. Deliveries should exceed 120 units, revenues should exceed $6.5bn, adjusted EBIT and adjusted EBITDA to above $375m and $825m respectively.
Adjusted liquidity remains at approximately $1.8bn, which includes cash and cash equivalents of $1.4bn as well as $0.4bn of cash collateral.
Bombardier has also paid off $373m of debt in the Q2 2022, which brings Bombardier’s year-to-date debt repayment up to $773m using cash on hand.
“Our ability to execute our plan was externally recognised, most notably with Moody’s upgrade to our credit rating,” added Martel. “I am particularly proud of this achievement as it underscores that we are making the right financial decisions around order backlog, margin expansion, free cash flow generation, and debt repayment.”