Embraer Publishes Second Quarter 2022 Earnings Results

DALLAS - Brazilian aerospace company Embraer consolidated revenues of US$1,018.9m in the second quarter of 2022, representing a decrease of 9.9% y-o-y.

Revenue was mostly driven by lower deliveries in Commercial and Defense & Security and partially offset by higher revenues in Services & Support.

Embraer's commercial aviation arm reported a revenue reduction of 23% y-o-y of US$299.9m due to lower aircraft deliveries in the quarter. The company also reported a 2Q22 consolidated gross margin from commercial aviation of 13.2% higher than the 4.5% reported in 2Q21.

The company's firm order backlog ended 2Q22 at US$17.8bn (+US$0.5bn versus 1Q22). According to Embraer, this is the highest quarter backlog post-pandemic, driven by solid order activity.

Embraer's recent announcement of 20 E195-E2 firm orders from Canadian regional carrier Porter Airlines (PD) at FIA2022 will be included in the 3Q22 backlog.

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Other Highlights from the Report

Embraer reported a 2Q22 consolidated gross margin of 22.9%, higher than the 18.2% reported in 2Q21, with y-o-y improvement in most segments due to product mix, pricing increase, and overall operational performance, including tax efficiencies.

Adjusted EBIT and EBITDA were US$81.2m and US$ 124.6m, respectively, yielding an Adjusted EBIT margin of 8.0% and an Adjusted EBITDA margin of 12.2%.

In 2Q22, Embraer reported Adjusted Net Income (excluding deferred taxes and special items) of US$39.4m and Earnings per Share of US$0.40.

Free cash flow (FCF) in 2Q22 was a surplus of US$91.2m, representing a significant improvement compared to the US$45.1m in FCF in 2Q21, supported by the divestment of Évora’s facilities and EVE’s IPO, offset by working capital needs and liability management strategy.

The Company finished the quarter with net debt of US$1.198bn, or US$ 0.255bn less than 1Q22 in line with the strategy to improve our capital structure and liability management.

The company reaffirms all aspects of its 2022 financial and delivery guidance with no material variation.

Featured image: The Embraer E195-E2 Tech Lion. Photo: Embraer SA