OTTAWA, ONTARIO -- (Marketwired) -- 07/11/13 -- NAV CANADA (the "Company") today released its financial results for the three and nine months ended May 31, 2013. The third quarter results show continued success in controlling costs while maintaining safe and efficient air navigation services in a period when air traffic levels were similar to those in the comparable period in the prior fiscal year (growth in air traffic of 0.1 per cent).
In the third quarter of fiscal 2013, the Company has achieved positive financial performance as evidenced by an improvement of $8 million in its rate stabilization account, finishing with a positive(i) balance of $60 million. When adjusted for rate setting purposes, there is a positive(i) "notional" balance of $93 million in the rate stabilization account, which is equal to its target balance.
"We continue to make investments in technology and systems that are enabling further improvements in safety and service while helping us control the growth in overall costs", said John Crichton, President & CEO. "The excellent work of all employees in carrying out this strategy has been vital to managing in the difficult traffic environment we have been experiencing over the past five years."
The Company's revenues before rate stabilization for the third quarter of fiscal 2013 were $306 million, compared to $303 million in the previous fiscal year.
Operating expenses before rate stabilization for the third quarter of fiscal 2013 were $260 million as compared to $256 million for the same period in fiscal 2012. Management continues to successfully manage its costs, largely offsetting higher compensation levels and inflationary increases.
Interest, depreciation and amortization expense before rate stabilization totalling $60 million was $1 million lower than in the comparable period in the previous fiscal year.
Positive fair value adjustments in the third quarter contributed $8 million to other income before rate stabilization. As at May 31, 2013, the fair value of the Company's investments in ABCP restructured and non-restructured notes is $266 million on holdings with a face value of $307 million. Of the total fair value variances from face value of $41 million, $33 million is considered recoverable over the terms of the notes.
Based on the above, the Company had an excess of expenses over revenue after rate stabilization of $13 million for the quarter. Given the normal seasonal variation in traffic volumes and the fact that our costs are predominantly fixed in nature, an excess of expenses over revenues in the quarter is expected. Excluding rate stabilization adjustments, expenses would have exceeded revenues and other income by $5 million for the quarter.
The Company's Financial Statements and Management's Discussion and Analysis for the three and nine months ended May 31, 2013 can be found at:
- Financial Statements
- Management's Discussion and Analysis
NAV CANADA is the country's private sector civil air navigation services provider. With operations from coast to coast to coast, NAV CANADA provides air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation.
(i)A positive balance in the rate stabilization account represents a liability on the Company's consolidated balance sheet, reflecting amounts returnable to customers through future customer service charges.
This press release contains certain forward-looking statements that are subject to important risks and uncertainties. Actual results may differ materially from the results indicated in these statements for a number of reasons. NAV CANADA disclaims any intention to update any forward-looking statements.
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