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 endedÂ June 30, 2011. These results reflect Canadian Helicopters’ conversion to a corporation onÂ December 31, 2010Â and the adoption, onÂ January 1, 2011, of International Financial Reporting Standards (“IFRS”). Results for the prior year period have been restated, for comparability.
|Financial Highlights||Quarters endedÂ June 30,||Six months ended June 30,|
|(in thousands of dollars, except per share data)||2011||2010||2011||2010|
|Adjusted net income (2)||15,109||7,291||19,891||7,096|
|Per share/unit – basic and diluted ($)||1.15||0.56||1.52||0.54|
|Net income (loss) (3)||15,109||1,194||19,891||(19,124)|
|Per share/unit – basic and diluted ($) (3)||1.15||n.a.||1.52||n.a.|
|Cash flows related to operating activities (4)||21,300||8,353||29,054||8,680|
|Weighted-average shares/units outstanding (all classes)||13,068,700||13,068,700||13,068,700||13,068,700|
Earnings before interest, income taxes, depreciation and amortization, gain or loss on disposal of property, plant and equipment and share of net loss of an associate, distributions to Unitholders and holders of Exchangeable Class B LP Units and change in fair value of Units and Exchangeable Class B LP Units
|(2)||Excluding certain significant impacts, in 2010, from classifying the Fund Units and Exchangeable Class B LP Units as financial liabilities before the Fund’s conversion into an incorporated entity.|
|(3)||Prior toÂ December 31, 2010, Units and Exchangeable Class B LP Units were classified as financial liabilities before their conversion into shares of the Company. Therefore, the comparability of the net income (loss) and the concept of earnings per Unit did not apply before the Fund’s conversion into an incorporated entity onÂ December 31, 2010. Please refer to the adjusted net income per unit as above.|
|(4)||Before net changes in non-cash working capital balances|
The Company generated revenue ofÂ $63.3 million, representing an increase ofÂ $18.9 million, or 42.6%, over revenue ofÂ $44.4 millionÂ in the second quarter of 2010. Visual Flight Rules (VFR) revenue increasedÂ $17.8 millionÂ primarily due to revenues from medium and additional heavy aircraft contracted inÂ AfghanistanÂ and, to a lesser extent, to higher activity in the domestic mining market. Instrument Flight Rules (IFR) revenue decreasedÂ $1.4 millionÂ mainly resulting from reduced emergency medical services revenue. Ancillary revenue grewÂ $2.5 millionÂ essentially due to the consolidation of maintenance revenues from Heli-Welders and Nampa Valley Helicopters for the full period, versus less than a month last year, and to higher revenue from the DND Contracted Flying Training and Support Contract. Revenue-flying hours increased 27.1% to 19,776 hours.
EBITDA for the second quarter of 2011 reachedÂ $23.4 million, up fromÂ $12.3 millionÂ a year earlier. This increase mainly reflects higher operating activity and a more favourable mix resulting from increased activity inÂ AfghanistanÂ where revenues reflect the significantly higher level of effort required to accomplish the work.
As a result, second quarter adjusted net income amounted toÂ $15.1 million, orÂ $1.15Â per share, versusÂ $7.3 million, orÂ $0.56Â per unit in 2010. Adjusted net income excludes certain significant impacts from classifying the Fund Units and Exchangeable Class B LP Units as financial liabilities before the Fund’s conversion into an incorporated entity onÂ December 31, 2010. These significant impacts, mostly of a non-cash nature, reduced net income byÂ $6.1 millionÂ in the second quarter of 2010.
Reflecting higher net income, cash flows related to operating activities before net changes in non-cash working capital balances reachedÂ $21.3 millionÂ in the second quarter of 2011, up fromÂ $8.4 millionÂ in the corresponding period a year earlier.
“We are pleased with the strong performance of Canadian Helicopters in the second quarter.Â Our contracted aircraft flew the expected number of hours inÂ AfghanistanÂ in support of the U.S. military, while recovering demand in the domestic mining sector benefited our Canadian VFR operations. Moreover, our recent acquisitions in the repair and maintenance sector continued to perform as expected. As a result of these increased activities, our fixed costs have been more efficiently absorbed which, combined with the nature of our contracted work inÂ Afghanistan, allowed for a significant enhancement in operating profitability,” saidÂ Don Wall, President and Chief Executive Officer of Canadian Helicopters
For the six-month period endedÂ June 30, 2011, revenue reachedÂ $110.2 million, up 51.2% fromÂ $72.9 millionÂ in the corresponding period in 2010. VFR revenue increasedÂ $34.4 millionÂ mainly due to contracted aircraft inÂ Afghanistan, IFR revenue declinedÂ $1.7 millionÂ as a result of reduced EMS activity, while ancillary revenue grewÂ $4.6 millionÂ reflecting the consolidation of maintenance revenues from Heli-Welders and Nampa Valley Helicopters and higher revenue from the CFTS contract. Canadian Helicopters flew 30,028 hours in the first six months of 2011, up 24.5% from the year prior.
EBITDA amounted toÂ $32.3 million, up significantly fromÂ $13.0 millionÂ a year earlier. Adjusted net income reachedÂ $19.9 million, orÂ $1.52Â per share, versusÂ $7.1 million, orÂ $0.54Â per share, last year. Finally, cash flows related to operating activities before net changes in non-cash working capital balances totalledÂ $29.1 million, compared withÂ $8.7 millionÂ in 2010.
Subsequent to the end of the second quarter, onÂ July 7, 2011, Canadian Helicopters completed its previously announced acquisition of Helicopters (N.Z.) Limited, (“HNZ”). Headquartered in Nelson,Â New Zealand, HNZ has 11 bases to support operations acrossÂ New Zealand,Â Australia,Â LaosÂ andÂ CambodiaÂ as well as a corporate office inÂ PerthÂ to support its Australian operations. As it is located in the southern hemisphere, HNZ’s business will be counter seasonal to the Company’s domestic operations inÂ Canada.
The transaction purchase price of NZ$154Â million (approximately C$123 million) was funded with a combination of cash on hand and a $93Â million drawdown on a new revolving credit facility ofÂ $125 million. This new facility matures inÂ December 2013.
“The international scope of our operations has been significantly widened by the addition of HNZ to the Canadian Helicopters group of companies.Â In addition to contracted services delivered inÂ AfghanistanÂ and Antarctica, our fixed transportation and third party maintenance facilities now spanÂ Canada,Â Australia,Â New ZealandÂ and regions of southeast Asia. This international character of CHL is integral to our efforts to steadily build shareholder value. In the quarters ahead, we expect our contracts inÂ AfghanistanÂ to continue to generate strong revenues, while domestic demand recovers as a result of momentum in the natural resources sector.Â With our financial position remaining solid, we will go on pursuing suitable acquisition opportunities to enhance our core services and extend our reach,” concludedÂ Mr. Wall.
Canadian Helicopters will hold a conference call to discuss these results onÂ August 12, 2011Â atÂ 11:00 AM (ET). Interested parties can join the call by dialing 416-644-3426 (Toronto) or 1-800-731-5319 (toll free). If you are unable to call at this time, you may access a tape recording of the meeting by calling 416-640-1917 (local) or 1-877-289-8525 (toll free) followed by access code 4463464 followed by #. This tape recording will be available untilÂ August 19, 2011.
ABOUT CANADIAN HELICOPTERS GROUP INC.
Canadian Helicopters Group is an international provider of helicopter transportation and related support services with fixed primary operations inÂ Canada,Â Australia,Â New ZealandÂ and regions of southeast Asia. The group also delivers contracted on demand support inÂ AfghanistanÂ and Antarctica. Charter operations are provided under two brands: HelicoptersÂ New ZealandÂ (HNZ) in the Asia Pacific and Antarctica regions and Canadian Helicopters Limited (CHL) inÂ CanadaÂ andAfghanistan. In addition to charter services, the Company provides flight training and third party repair and maintenance services. With headquarters nearÂ Montreal,Â Canada, the Company operates 160 helicopters and employs approximately 800 personnel.
This press release contains forward-looking statements relating to the future performance of the Company and in particular with respect to the continuing business relationship inÂ AfghanistanÂ and expected revenues from USTRANSCOM. 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.
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