Embraer executive aviation 2Q margins widen despite lower revenue
Embraer Executive Aviation division reported a decline in revenue for the second quarter of 2024. Sales dropped by 11% compared to the same period last year, reaching $335.5m. The company attributed this decrease to lower aircraft deliveries.
“Executive Aviation delivered 27 jets in Q2, compared to 30 aircraft in the same quarter of 2023,” said Antonio Carlos Garcia, the company’s chief financial officer during the earnings call.
Despite the revenue dip, the division’s profitability improved. Gross profit margin increased to 20% from 19.8% in the previous quarter, although gross profit itself fell by 10% sequentially.
More impressively, operating income (EBIT) surged 14% compared to the first quarter, driven by a wider EBIT margin of 11.3%.
“In executive aviation, we continue to capitalise on the good sales momentum in both fleet and retail markets, with solid demand across our product portfolio,” added Francisco Gomes Neto, Embraer chief executive officer. “In executive aviation, we recorded the strongest first semester in terms of revenues and deliveries for the division over the past 10 and 8 years, with $575m and 45 aircraft.”
Aircraft deliveries were up from the first quarter but below the same period in 2023. The company delivered 27 executive jets, comprising 20 light jets and seven mid-size jets. While this represents an increase from the previous quarter, it falls short of the 30 jets delivered in the second quarter of 2023.
The light jet category saw growth, with deliveries of the Phenom 300 up 80% compared to the first quarter. However, deliveries of the Phenom 100 were significantly lower.
In the mid-size segment, deliveries of the three Praetor 500 and four Praetor 600 remained flat compared to the previous quarter but declined from the same period last year.
Overall, the company maintained its 2024 outlook of 125-135 executive jet deliveries.
Embraer order backlog remained unchanged at $4.6bn compared to the first quarter.
Overall, the company’s total backlog for executive, commercial and services segments hit a seven-year high of $21.1bn, up 20% year-over-year.
