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Embraer Releases Fourth Quarter and Fiscal Year 2008 Results in US GAAP

Written by thomas · Filed Under Aeronautics News 

March 27, 2009

thomas

SÃO JOSÉ DOS CAMPOS, BRAZIL–(Marketwire – March 26, 2009) – Embraer (BOVESPA: EMBR3) (NYSE: ERJ), the world’s leading manufacturer of commercial jets up to 120 seats, recorded fourth quarter 2008 (4Q08) net sales of US$1,818.4 million and net sales for FY2008 of US$6,335.2 million. Net Income for 4Q08 and for the full year totaled US$111.7 million and US$388.7 million, equivalent to diluted earnings per ADS of US$0.7181 and US$2.2432, respectively.

During the last quarter of 2008, Embraer increased the number of customers with firm orders for jets from the EMBRAER 170/190 family, with the sale of 11 E-Jets (six EMBRAER 170s and five EMBRAER 190s) to British Airways, from the United Kingdom.

The Company delivered the first EMBRAER 190s to Holland’s KLM Cityhopper, and EMBRAER 195s to Azul Linhas Aéreas, which is the first Brazilian airline to operate an E-Jet. Regional – Compagnie Aérienne Européene, a wholly owned subsidiary of Air France, received the 500th E-Jet in the last quarter of 2008. The entry level Phenom 100 jet received the Type Certificate (TC) from Brazil’s National Civil Aviation Agency (Agência Nacional de Aviação Civil – ANAC) and from the U.S. Federal Aviation Administration (FAA). The first two units of the jet were delivered in December 2008. At the end of the year, the ultra-large Lineage 1000 received the Type Certificate from ANAC and from the European Aviation Safety Agency (EASA) and the Supplemental Type Certificate (STC) from the FAA. During 4Q08, the Defense and Government segment signed an important Latin American contract for the Super Tucano with the Dominican Republic, and sold one aircraft for transporting government officials to the Royal Thai Army, in Asia.

The firm order backlog on December 31, 2008, decreased 3.2%, compared to September 30, 2008, and reached US$20.9 billion, reflecting the beginning of the economic downturn initiated in September. Embraer sold 11 E-Jets during 4Q08, compared to 112 new sales for FY 2008. The E-Jet firm order backlog accumulated a total of 876 firm orders and 810 options.

In 4Q08, Embraer delivered 59 jets in the Commercial Aviation, Executive Aviation, and Defense and Government segments. Total deliveries in 2008 were 204 jets, the highest for a year in the Company’s history, and consistent with Embraer’s delivery schedule for the year.

Net revenues for 4Q08 totaled US$1,818.4 million, or a 3% decrease, compared to US$1,875 million for 4Q07. For FY 2008, net revenues totaled US$6,335.2 million, or a 20.8% increase over FY 2007 net revenues of US$5,245.2 million.

The gross margin for 4Q08 totaled 20.8%, representing a decrease from the 22.6% gross margin of 4Q07. For FY 2008, gross margin totaled 21.2%, representing a decrease, compared to 22.0% reported for FY 2007.

Income from operations reached US$274.6 million in 4Q08, or 66.1% above the US$165.3 million recorded for the same period last year. In FY 2008, income from operations was US$537.1 million, or an increase of 43.5% over the US$374.2 million of FY 2007, mainly due to the productivity gains achieved during the year, combined with the recognition of approximately US$80 million in contributions from suppliers, due to the certification of the Phenom 100 entry level jet.

Net income decreased from US$200.9 million, in 4Q07, to US$111.7 million, in 4Q08, and the net margin was 10.7% and 6.1%, respectively. Net income also decreased to US$388.7 million, in 2008, from US$489.3 million, in 2007, and net margins decreased to 6.1% from 9.3%, respectively.

For the year ended December 31, 2008, the Company maintained its high level of liquidity. Its total cash position, at the end of 2008, was US$2,201.5 million. Deducting the total indebtedness of US$1,825.4 million, at the end of 2008, the net cash position on December 31, 2008, was US$376.1 million.

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