Photo: Ryan Remiorz Archives The canadian Press
In unveiling its results for the first quarter, the multinational company has indicated that this injection of capital should be used to “support the working capital” of Bombardier Transportation, which has to be handed over to the French giant Alstom.
Revenue up 5 % compared to the year 2019, a net loss of 200 million and a new injection of US $386 million from the Caisse de dépôt et placement du Québec in the Transportation division : the first quarter of Bombardier has been marked both by the beginning of the effects of the pandemic in its efforts to carry out transactions to improve its balance sheet.
The publication of the results also marks the debut of Eric Martel, former head of Hydro-Quebec, which has taken the reins of the company to be the successor to Alain Bellemare. Mr. Martel is familiar ground, having himself directed the business aircraft division before making the jump to the Crown corporation.
“Bombardier is taking the necessary steps to manage the impact of the pandemic COVID-19, said Mr. Martel. As the crisis was unfolding, we have acted quickly to protect the health and safety of our employees and support our customers to the best of our abilities. We also managed our business to reduce our costs, conserve our cash and to ensure sufficient liquidity to conduct our operations while we conduct the disposals necessary to clean up our balance sheet. ”
The company had suspended its financial forecast for the year 2020 at the end of the month of march, and believes it is still too early to establish a new forecast. In general, said Mr. Martel in the conference call, analysts expect that the business aircraft industry to reduce 25% to 30% of the deliveries that were planned prior to the start of the pandemic. However, it is a little premature to decide on the actual decrease is likely to happen, he said.
The québec-based manufacturer also continues to make progress for the sale of its Transport division to the French giant Alstom, which is expected to bring in net proceeds of between 4.2 and 4.5 billion, including shares of Alstom. The injection of US $386 million from the Caisse de dépôt will be used to ” support the working capital of the division, which the Fund now owns 36 %.
Bombardier has also indicated late Wednesday night that the sale of its program CRJ with Mitsubishi Heavy Industries will be formalized on the 1st of June sale, which will pay 550 million US$.
During the first quarter, Bombardier posted a net loss of $ 200 million, compared to net income of $ 239 million last year. Revenues were $ 3.7 billion, up 5 % compared to the same period in 2019.
Bombardier has stated that the use of free cash flow was $ 1.6 billion, which reflects an impact of 600 to 800 million, arising from the pandemic. The company has been unable to deliver airplanes, but she has also observed ” a larger than expected decrease in new orders expected in both Aviation and Transport “.
The order book decreased by 6 %, to $ 13.6 billion, in the business aircraft, and 8 %, to 33.1 billion, in the Transportation division.
“Bombardier has started to revive gradually the manufacturing activities of Aviation and Transportation. These raises are necessary to deliver our strong backlog of rail and continue the acceleration in the pace of aircraft production Global 7500 ” of which the finishing is done in Montreal, said Mr. Martel. “Then we restart our activities, our efforts remain focused on protecting our employees and the support of our customers during this difficult period, as well as on the implementation of the necessary measures to preserve the long-term future of the company. “
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