MIAMI — Brazilian plane manufacturer, Embraer, has unveiled its end of the year performance results for 2017.
Having such an attentive year with Boeing showing an acquisitive interest in them, and the manufacturer’s newest program, the Embraer E2 plane, may have pushed for further success compared to last year’s results.
During the last quarter of 2017, Embraer delivered 23 commercial, and 50 executive planes, allowing for a sharp end of 2017. In total, the manufacturer delivered a total of 101 commercial and 109 executive aircraft for the year.
In terms of revenues, Embraer registered a 14.% year-over-year decline to $1,733 million in Q417, which has been driven down due to the lack of new commercial orders and deliveries. On top of this, there has been a 15% decrease year-over-year in their defense program as well.
Looking at the fiscal year, consolidated revenues were recorded at $5,839.3 million, which is a 6.1% decrease compared to the $6,217.5 million recorded at the end of 2016.
However, although the 6.1% decrease has been presented in their findings, the consolidated revenue levels are still within the 2017 Guidance Range of $5.7-6.1 billion.
Regarding their EBIT (Earnings before interest and taxes), they recorded a profit of $66.7 million in 4Q17, featuring a 13.6% decrease from $276.3 million in FY16.
EBIT for the year looks to be more promising, showing a 5.6% and a 3.3% yield of $206 million in 2016 to $329.3 million in 2017.
The manufacturer’s backlog has decreased by $500 million during 4Q17 to the end of the year figure, being $18.3 billion overall.
Highlights for the Manufacturer in 4Q17
In October 2017, Embraer and American Airlines signed a firm order for ten E175 jets.
Combined with the airline’s two prior orders for the E175, this new contract results in a total of 74 E175s ordered by American Airlines. In the same month, Embraer announced a firm order from SkyWest, Inc. for 20 E-Jets.
SkyWest will receive 15 E175 SC (Special Configuration) aircraft, in a 70-seat layout. The E175 SC aircraft is based on an E175 airframe, which can be retrofitted to 76 seats in the future. SkyWest will also receive five E175s in a 76- seat configuration, similar to aircraft SkyWest has previously ordered.
In December 2017, Embraer celebrated the delivery of its 1,400th E-Jet, to American Airlines.
The E-Jets E2 development program remains on schedule, on budget and better than initially specified. The manufacturer tells Airways the first E2 delivery is expected to happen during the first weeks of April.
Discussions with Boeing
Within their published report, Embraer placed a comment regarding their discussions with Boeing.
“In 2017, we commenced discussions with Boeing regarding a possible business combination. We already have active partnerships in various areas with Boeing, including engineering, as well as ecological, social and cultural projects. The negotiations are ongoing. Any business combination between the Company and Boeing would be subject to the approval of the Brazilian federal government, Brazilian and international regulators, Boeing, and Embraer. We cannot assure you that a business combination with Boeing will materialize.”
With this quote, it seems unclear whether there are any positive or negative negotiations going on. With context, it would be down to the fact that the Brazilian Government is looking for strong reassurances on their KC-390 program and whether that can continue in a Boeing-dominated work structure.
Looking int0 2018
Going into 2018, Embraer expects commercial jet deliveries to decline to a range of 85 to 95 jets as they begin their first year of transition from the current E1 into the new E2 program.
Deliveries of the E175 model are apparently expected to continue to dominate most of the manufacturer’s total deliveries, with the E190-E2 only starting off with the five to ten deliveries for the year.
The manufacturer has also amended their Company Guidance Range for 2018, which is significantly lower than the 2017 guidance range.
The new Guidance Range is expected to be between $5.4-5.9 billion, which conveys another sense of decline looking into 2018.
Embraer also expects EBIT data to vary between $270 million to $355 million for the year, which highlights a level of stability to the manufacturer while the transition of programmes is undergoing.