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Nav Canada today released its financial results for the three and six months ended February 29, 2024.
In the second quarter of fiscal 2024, the company saw air traffic levels, as measured in weighted charging units, increase 8.3 per cent on a year over year basis.
Excluding the effect of an extra day for the leap year, air traffic levels were 7.1 per cent higher. The company’s revenue for the second quarter of fiscal 2024 was $393 million, compared to $388 million over the same period in fiscal 2023.
The company had negative free cash flowof $28 million in the second quarter of fiscal 2024 as compared to positive free cash flow of $34 million in the same period in fiscal 2023.
The decrease in free cash flow is driven by higher cash outflows for operating expenditures, primarily due to higher compensation costs, as compared to the second quarter of fiscal 2023. The company ended the quarter with a cash balance of $570 million.
“The second quarter demonstrated a number of positives – including greater operational resilience, preparedness and performance within the ecosystem. At the same time, the sector remains sensitive to fluctuations in passenger demand, supply chain, economic uncertainty and potential government policy changes,” said Raymond G. Bohn, president and CEO, Nav Canada.
“Maintaining our focus on the future while being financially responsible today is part of our plan to support our customers and be a positive force operationally, environmentally and socially within the global community. On that front, we have reached an important milestone towards trajectory-based operations (TBO) by signing an agreement with Indra to deploy their modern air traffic management systems, becoming the first non-European air navigation service provider to join the iTEC SkyNex Alliance. This partnership will be a major boost to Nav Canada’s future roadmap and its commitment to maintaining a safe, efficient and modern air navigation system.”
Operating expenses for the second quarter of fiscal 2024 were $435 million as compared to $371 million over the same period in fiscal 2023, primarily due to an asset impairment and higher compensation costs as a result of both higher wage and staffing levels.
Net other income and expenses for the second quarter of fiscal 2024 were a net expense of $24 million as compared to $20 million over the same period in fiscal 2023, as a result of an asset impairment offset by higher interest income.
The company had net loss (before net movement in regulatory deferral accounts including rate stabilization) of $66 million in the second quarter of fiscal 2024 as compared to $3 million for the second quarter of fiscal 2023.
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 second quarter of fiscal 2024 was an income of $30 million as compared to an expense of $33 million over the same period in fiscal 2023.
This change in regulatory deferrals is primarily due to a decrease in favourable rate stabilization adjustments of $8 million and a $55 million net increase in adjustments required to align the accounting recognition of certain transactions to the periods in which they will be considered for rate setting.
As at February 29, 2024, the rate stabilization account had a balance of $259 million to be recovered from customers through future customer service charges.
This press release was prepared and distributed by Nav Canada.
