HNZ reports results for Q1 ended 31-Mar-13

HNZ reports results for Q1 ended 31-Mar-13

15-May-2013 Source: HNZ Group

The Corporation generated revenue of $54.2million, compared with revenue of $62.5million in the first quarter of 2012. This net decrease is mainly due to the completion of the Ornge contract in the first quarter of 2012 and a decrease in revenues from the northern and southern hemisphere markets due to the current challenging economy. The contracts in Afghanistan, in aggregate, are experiencing a level of activity not significantly different from those anticipated and previously announced. For the quarter, the Corporation flew 9,272 hours compared to 12,544 hours in the first quarter of 2012.

Visual Flight Rules (VFR) revenue decreased by $3.4million primarily due to a decrease in revenues from the Canadian and Australian markets. Instrument Flight Rules (IFR) revenue declined by $4.1 million mainly due to the completion of the EMS contract with Ornge in Ontario in March 2012 partially offset by the increase in mining revenues in Australia. Ancillary revenue, including the Contracted Flying Training and Support contract with the Canadian military, decreased by $0.8million due to a reduction of aircraft lease revenue in its southern hemisphere operations.

EBITDA for the first quarter of 2013 reached $12.8 million, versus $14.6 million a year earlier. The EBITDA decline is primarily attributable to lower revenues experienced in 2013 while maintaining the same overall margin.

As a result, net income attributable to the shareholders of the Corporation amounted to $6.5 million, or $0.50 per share, compared with $8.2 million, or $0.63 per share in the first quarter of 2012. Reflecting the variation in net income, cash flows related to operating activities before net change in non-cash working capital balances and deferred revenues were $11.4 million in the first quarter of 2013, versus $12.2million in the corresponding period a year earlier.

“We are pleased with HNZ’s performance during the quarter, in view of the termination and non-renewal of some large contracts as well as challenging economic conditions,” said Don Wall, President and CEO of the Corporation. “The seasonal weak first quarter in the northern hemisphere was partially compensated for in the southern hemisphere. For example, on a year-over-year basis we experienced less demand for our firefighting services.”

As at March 31, 2013, the Corporation’s financial position remains strong with working capital of $46.4 million and debt, net of cash and cash equivalents and bank indebtedness, of $45.5 million, with $53 million drawn under the Corporation revolving operating credit facility of $125 million. The credit facility maturity has been extended from January 31, 2014 to January 31, 2017.The Corporation also has an option to increase the credit facility to $175 million subject to certain conditions. For the first quarter, the long-term debt-to-equity ratio was 0.21, compared to 0.23 a year ago.

“The effort to align expenses with revenues, and maximize margins given the business we have, will always be a priority at HNZ. One of the principal strengths of our Company has been its ability to adapt to changing circumstances in the marketplace. In the year ahead, we will stay focused on network optimization and sharing of best practices.” concluded Mr. Wall.

The Corporation will hold a conference call to discuss these results on May 15, 2013 at 2:30 PM(ET). Interested parties can join the call by dialing 514-807-9895 (Montreal) or 1-888-231-8191 (toll free). If you are unable to call at this time, you may access a tape recording of the conference call by dialing 416-849-0833 (Toronto), 514-807-9274 (Montreal), or 1-855-859-2056 (toll free) followed by access code: 65162419. This tape recording will be available until May 16, 2013.

The Corporation is an international provider of helicopter transportation and related support services with operations in Canada, Australia, New Zealand, Afghanistan, Antarctica and Southeast Asia. The Corporation operates in excess of 130 helicopters in support of a range of multinational companies and government agencies, including onshore and offshore oil and gas, mineral exploration, military support, hydro and utilities, forest management, construction, air ambulance and search and rescue. In addition to charter services, the Corporation provides flight training and third-party repair and maintenance services. The Corporation is headquartered near Montreal, Canada and employs approximately 800 personnel from35 locations around the world. The Corporation operates from fixed-base locations as well as from temporary locations, commonly referred to as “pool locations”, and provides helicopters in a wide variety of climatic conditions and terrain across Canada, Australia, New Zealand Afghanistan, Antarctica and Southeast Asia.

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