Canadian Helicopters Group Inc. (TSX: CHL.A, CHL.B) (“the Company”), an international provider of helicopter transportation and related support services, today announced its financial and operating results for the second quarter ended June 30, 2012 .

SECOND QUARTER RESULTS
The Company generated revenue of $62.9 million , stable in comparison with revenue of $63.3 million in the second quarter of 2011. HNZ’s contribution to revenue of $11.0 million was offset by the expiry of emergency medical services (EMS) activities in Ontario in March 2012 and the conclusion of one contract in Afghanistan in November 2011 . Revenue flying hours amounted to 17,060 hours, including 1,523 hours flown at HNZ.

Visual Flight Rules (VFR) revenue decreased by $3.2 million primarily due to the termination of one contract in Afghanistan on November 30, 2011 , partially offset by a $1.9 million contribution from HNZ, mostly arising from fire fighting, environment and utility sector. Instrument Flight Rules (IFR) revenue declined $0.7 million , as the end of EMS activities in Ontario was mostly offset by a $6.8 million contribution from HNZ, primarily in the oil and gas and mining industries. Ancillary revenue grew $3.5 million , including $2.3 million through HNZ activities and the balance in North America .

EBITDA for the second quarter of 2012 reached $21.1 million , versus $23.4 million a year earlier. This year-over-year reduction mainly reflects the aforementioned termination of two contracts partially offset by the business of HNZ acquired in July 2011 . As a result, net income amounted to $12.4 million , or $0.93 per share, compared with $15.1 million , or $1.15 per share in 2011. Reflecting the variation in net income, cash flows related to operating activities before net change in non-cash working capital balances was $17.4 million in the second quarter of 2012, versus $21.3 million in the corresponding period a year earlier. 

“Canadian Helicopters had a solid operating performance in the second quarter, despite the expiry of the two contracts. As anticipated, the termination of these contracts resulted in lower revenue for our North American operations, offsetting activity levels consistent with expectations for contracts in Afghanistan and higher repair and maintenance revenue. Driven by the resource sector, our southern hemisphere operations performed as anticipated in what has traditionally been a seasonally slower quarter at HNZ,” said Don Wall , President and Chief Executive Officer of Canadian Helicopters.

As at June 30, 2012 , Canadian Helicopters’ financial position remains strong with debt, net of cash and cash equivalents and bank indebtedness of $49.0 million , drawn under its authorized revolving operating credit facility of $125 million . As a result, the long-term debt-to-equity ratio was 0.24 as at June 30, 2012 , while cash and cash equivalents, net of bank indebtedness, stood at $4.0 million . Historically, the Company’s cash and cash equivalents have always been at their lowest level at the end of the second quarter.

SIX-MONTH RESULTS
For the six-month period ended June 30, 2012 , revenue reached $125.4 million , up 13.8% from $110.2 million in the corresponding period of 2011. HNZ generated revenue of $29.5 million in the first half of 2012. VFR revenue increased $4.7 million due to $11.1 million in revenue from HNZ partially offset by expiry of one contract in Afghanistan . IFR revenue increased $3.6 million , as a $13.5 million contribution from HNZ was mostly offset by the end of Ontario EMS activities in March 2012 . Ancillary revenue increased $6.9 million , including $4.9 million through HNZ activities and the balance in North America . Canadian Helicopters flew 29,604 hours in the first six months of 2012, versus 30,028 hours a year earlier.

EBITDA amounted to $35.7 million , up from $32.3 million a year earlier. Net income stood at $20.7 million , or $1.56 per share, compared with $19.9 million , or $1.52 per share, last year. Finally, cash flows related to operating activities before net changes in non-cash working capital balances totaled $29.4 million , versus $29.1 million , in 2011.

RECENT EVENTS
On August 6, 2012 , HNZ entered into an offshore oil and gas helicopter support contract with Shell Global Solutions International B.V. (“Shell”). Beginning in September 2013 , HNZ will provide crew change helicopter services from Manila to Shell’s offshore petroleum platforms in the Philippines using one AgustaWestland AW 139 helicopter. Commencing in the second quarter of 2014, a second AgustaWestland AW 139 helicopter will also be deployed to support oil and gas exploration and development work by Shell in the Philippines . The initial term of the contract is four years with potential five one-year option periods, exercisable by the customer. Revenues under the contract during the initial four year term are expected to be approximately US$40 million. The two aircraft required to perform the work will be obtained by way of purchase or lease.

On July 10, 2012 , HNZ entered into an agreement with Rio Tinto to renew and extend an essential support contract to provide a marine pilot transfer service to Rio Tinto’s iron ore carriers in Dampier and Cape Lambert ports in Western Australia . The new contract is for a 10 year period starting May 1, 2013 . Revenues for the duration of the contract are expected to be at least AU$125 million (CA$130.3 million), AU$11 million higher than the previous agreement. Beginning in March 2013 , HNZ will replace its existing two Eurocopter EC 145 aircraft with three new AgustaWestland AW109 SP “GrandNew” helicopters to provide contracted services. All three “GrandNew” aircraft will be in service by September 2013 .

OUTLOOK
“We are looking forward to continuing our longstanding relationship with Rio Tinto in Western Australia , as well as to further leverage our strong relationship with Shell through the new business in the Philippines . In addition, our solid financial position enables us to remain proactive in our search for growth opportunities, both through acquisitions and organic fleet expansion that complements existing activities. The second half of 2012 will reflect the expiry of the Ontario EMS and Afghanistan contracts, as well as slight reduction in mining activity in Canada . However, we expect our ongoing business to continue to be strong both domestically and abroad. Lastly, our pending name change to HNZ Group Inc. will enhance the international marketability and branding of the entire organization, while further leveraging the excellent reputation of HNZ. This re-branding will be an important marketing tool, as we continue to study entry opportunities in other geographic areas,” concluded Mr. Wall .

CONFERENCE CALL 
Canadian Helicopters will hold a conference call to discuss these results on August 15, 2012 at 11:00 AM (ET ). Interested parties can join the call by dialing 647-427-7450 ( Toronto ) or 1-888-231-8191 (toll free). If you are unable to call at this time, you may access a tape recording of the meeting by calling 416-849-0833 ( Toronto ), 514-807-9274 ( Montreal ), or 1-855-859-2056 (toll free) followed by access code 13736517. This tape recording will be available until August 23, 2012 .

ABOUT CANADIAN HELICOPTERS GROUP INC.
Canadian Helicopters Group is an international provider of helicopter transportation and related support services with fixed primary operations in Canada , Australia , New Zealand and regions of Southeast Asia. The group also delivers contracted on demand support in Afghanistan and Antarctica. Charter operations are provided under two brands: Helicopters New Zealand (HNZ) in the Asia Pacific and Antarctica regions and Canadian Helicopters Limited (CHL) in Canada and Afghanistan . In addition to charter services, the Company provides flight training and third party repair and maintenance services. With headquarters near Montreal , Canada , the Company operates approximately 140 helicopters and employs approximately 800 personnel.

FORWARD-LOOKING STATEMENTS 
This press release contains forward-looking statements relating to the future performance of the Company. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they were made. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise unless being required by applicable laws.

DEFINITION OF NON-IFRS MEASURES: EBITDA
References to “EBITDA” are to earnings before net financing charges, income taxes, depreciation and amortization and gain or loss on disposal of property, plant and equipment. Since EBITDA is a metric used by many investors to compare issuers on the basis of the ability to generate cash from operations, management believes that in addition to net earnings or loss, EBITDA is a useful supplementary measure.

EBITDA is not a measure recognized under IFRS and does not have standardized meanings prescribed by IFRS. Therefore, EBITDA may not be comparable with similar measures presented by other entities. Investors are cautioned that EBITDA should not be construed as an alternative to net earnings determined in accordance with IFRS as indicators of the Company’s performance, or to cash flows from operating, investing and financing activities as measures of liquidity and cash flows.

Note to readers:  Complete consolidated unaudited interim financial statements and Management’s Discussion & Analysis of Operating Results and Financial Position are available on Canadian Helicopters’ website at www.canadianhelicopters.com and on SEDAR at www.sedar.com.