Category Archives: CAE Inc.

CAE reports first quarter fiscal 2018 results and announces dividend increase

 

 

  • Revenue of $698.9 million vs. $651.6 million in prior year
  • EPS from continuing operations of $0.24 vs. $0.25 ($0.26 before specific items(1)) in prior year
  • CAE announces new strategic developments with longstanding airline customers in Asia
  • Board of Directors approves 13% quarterly dividend increase from $0.08 to $0.09 per share

Montreal, Canada, August 10, 2017 – (NYSE: CAE; TSX: CAE) – CAE today reported revenue of $698.9 million for the first quarter of fiscal year 2018, compared with $651.6 million in the first quarter last year.    First quarter net income attributable to equity holders from continuing operations was $63.8 million ($0.24 per share) compared to $68.7 million ($0.25 per share) last year, or $70.9 million ($0.26 per share) before specific items(2) last year.
First quarter operating profit was $97.8 million (14.0% of revenue) compared with $89.0 million (13.7% of revenue) in the first quarter last year.    All financial information is in Canadian dollars unless otherwise indicated.
“Our progress in the first quarter supports our full year outlook, which remains unchanged,” said Marc Parent, CAE’s President and Chief Executive Officer.    “We continue to enjoy good demand for CAE’s solutions in a strong market environment.    The new strategic developments with airlines announced today strengthen CAE’s position in China and the ASEAN region, the fastest growing commercial aviation markets in the world.    Underscoring our positive outlook, I am pleased to announce that CAE’s Board of Directors has approved a one cent or 13% increase to CAE’s quarterly dividend, which becomes nine cents per share, effective September 29, 2017.”

Summary of consolidated results

(amounts in millions) Q1-2018 Q4-2017 Q3-2017 Q2-2017 Q1-2017
Revenue $ 698.9 734.7 682.7 635.5 651.6
Total segment operating income(3) $ 97.8 120.9 101.4 85.8 92.1
Operating profit(4) $ 97.8 100.9 98.6 76.2 89.0
As a % of revenue % 14.0 13.7 14.4 12.0 13.7
Restructuring, integration and acquisition costs, net of tax $ 15.0 2.0 7.2 2.2
Net income $ 65.4 69.1 69.3 48.9 69.3
Net income attributable to equity holders of the Company:
from continuing operations $ 63.8 67.4 67.6 48.3 68.7
from discontinued operations $ (0.7) 0.2 0.1 (0.1)
Net income before specific items $ 63.8 82.4 69.6 55.5 70.9
Total backlog(5) $ 7,326.2 7,530.2 7,393.1 6,535.0 6,527.6

Civil Aviation TrainingSolutions (Civil)
First quarter Civil revenue was $411.8 million, up 11% compared to the same quarter last year, and segment operating income was $73.1 million (17.8% of revenue), up 15% compared to the first quarter last year. First quarter Civil training centre utilization(6) was 78%.    The first quarter includes the impact of the standardization of certain types of simulators on revenue recognition. Civil revenue and segment operating income, if adjusted (7)(8) for the impact of this change would have been $452.0 million and $83.7 million this quarter, respectively.    The impact during the first quarter of fiscal year 2017 was minimal.
During the quarter, Civil signed training solutions contracts with an order intake (5) value of $400.4 million, including agreements for ab initio pilot training for Jet Airways in India, and business aviation pilot training for MHS Aviation and Elit’Avia in Europe.    Also during the quarter, Civil sold 8 full-flight simulators.
The Civil book-to-sales (5) ratio was 0.97x for the quarter and 1.07x for the last 12 months.    The Civil backlog at the end of the quarter was $3.2 billion.
Since the end of the quarter, Civil made further progress on CAE’s vision to be the worldwide training partner of choice with new strategic developments involving airline customers in Asia.
In an agreement between CAE and China Southern Airlines, China Southern has acquired CAE’s 49% equity stake in the Zhuhai Flight Training Centre (ZFTC) for US$96 million.    The evolution of this relationship allows CAE greater flexibility to address the broader aviation training market in China and the ASEAN region, and the opportunity to align its capital investment with its strategic priorities.    As part of the transaction, China Southern Airlines will outsource to CAE third-party airline training being conducted at ZFTC.    CAE will continue to serve China Southern as its partner for training services support, ab initio pilot training, and for its simulation equipment needs.
In response to reports published by the media, CAE confirms it is in advanced discussions with AirAsia to conclude a sale and purchase agreement for CAE to acquire AirAsia’s 50% share of the Asian Aviation Centre of Excellence Sdn. Bhd. JV.    CAE’s relationship with AirAsia began in 2004 and with this agreement, it would expand with a contract for all AirAsia training requirements and that of its affiliates, in support of all the aircraft types it operates for an extended term.    The transaction is subject to the successful conclusion of a sale and purchase agreement between the parties.

Summary of Civil Aviation Training Solutions results

(amounts in millions except operating margins, SEU and FFSs deployed) Q1-2018 Q4-2017 Q3-2017 Q2-2017 Q1-2017
Revenue $ 411.8 417.8 412.8 354.7 371.6
Segment operating income $ 73.1 83.8 71.4 54.2 63.8
Operating margins % 17.8 20.1 17.3 15.3 17.2
Total backlog $ 3,225.0 3,288.9 3,253.5 3,337.6 3,221.6
SEU(9) 209 210 209 210 209
FFSs deployed 269 269 269 269 26

 

Defence and Security (Defence)
First quarter Defence revenue was $263.2 million, up 2% compared to the same quarter last year and segment operating income was $26.3 million (10.0% of revenue), compared to $28.4 million (11.0% of revenue) in the first quarter last year.
During the quarter, Defence order intake was valued at $262.4 million.    Notable wins include a Training Systems Integration contract with the UAE for a comprehensive training solution for the Predator XP and a contract from Airbus related to the in-service support of the C295W Fixed-Wing Search and Rescue training program in Canada. As well, Defence received a series of orders from Lockheed Martin involving C-130J fuselage trainers for the U.S. Air Force and U.S. Marine Corps.    Also notable during the quarter, the first cohort of U.S. Army students to go through the new Initial Entry Fixed-Wing course at CAE’s Dothan, Alabama training centre graduated to become Army fixed-wing aviators.
The Defence book-to-sales ratio was 1.00x for the quarter and 1.31x for the last 12 months (excluding contract options).    The Defence backlog, including options and CAE’s interest in joint ventures, at the end of the quarter was $4.1 billion.

Summary of Defence and Security results

(amounts in millions except operating margins) Q1-2018 Q4-2017 Q3-2017 Q2-2017 Q1-2017
Revenue $ 263.2 282.7 243.7 253.2 257.3
Segment operating income $ 26.3 33.0 30.0 29.0 28.4
Operating margins % 10.0 11.7 12.3 11.5 11.0
Total backlog $ 4,101.2 4,241.3 4,139.6 3,197.4 3,306.0

 

Singapore Airlines and CAE to establish flight training centre in Singapore

 

 

Singapore, August 10, 2017 – Singapore Airlines (SIA) and CAE (NYSE: CAE; TSX: CAE) have signed a Memorandum of Understanding (MOU) to establish a joint venture for pilot training in Singapore.  The joint venture will initially focus primarily on providing simulator training for Boeing aircraft types, supporting SIA Group airlines and other operators’ pilot training needs in the region.
The equally-owned joint venture centre will operate out of the Singapore Airlines Training Centre (STC) located near Changi Airport.    SIA will initially transfer four of its full-flight Boeing aircraft simulators to the venture, while additional CAE-built training equipment will be acquired progressively.    The training facility will provide a full range of initial type rating and recurrent training programmes for Boeing 737 MAX, 747, 777 and 787 aircraft types.
“The long-term prospects for the aviation sector are positive, and we are confident that the new flight training joint venture with CAE will further enhance Singapore’s position as a leading aviation hub.    With the SIA Group expanding its fleet to drive additional growth, the joint venture will help keep pace with our own training requirements as well as those of other airlines in the region.    This investment with CAE, one of the world’s leading civil aviation training organisations, is also in line with our push to drive revenue-generation from new adjacent businesses.    Together with CAE’s expertise, we are positive that it will be a leading training facility for Boeing aircraft types in the Asia-Pacific region,” said Singapore Airlines CEO, Mr. Goh Choon Phong.
“Building on our relationship of more than 40 years, we are extremely honoured to join forces with Singapore Airlines and welcome this opportunity to leverage the strengths of our combined organisations to support the growing pilot training needs in the Asia-Pacific region – one of the fastest growing markets in commercial aviation,” said CAE’s President and CEO, Mr. Marc Parent.    “This new joint venture will deliver best-in-class training, and will be an asset in supporting the growth of Singapore Airlines, one of the world’s premier carriers. CAE is dedicated to offering customers the most innovative training solutions to achieve the highest levels of safety and efficiency.”
The closing of the transaction is subject to execution of definitive transaction documents and customary closing conditions, including regulatory approvals. Subject to approvals, operations are expected to begin by the end of the year.