NAV CANADA announces first quarter financial results
OTTAWA, ON, Jan. 8, 2025 /CNW/ - NAV CANADA today released its financial results for the three months ended November 30, 2024.
In the first quarter of fiscal 2025, the Company saw air traffic levels, as measured in weighted charging units(1), increase by 3.6% on a year over year basis. The Company's revenue for the first quarter of fiscal 2025 was $449 million, compared to $464 million over the same period in fiscal 2024.
The Company had positive free cash flow(2) of $83 million in the first quarter of fiscal 2025 as compared to positive free cash flow of $98 million in the same period in fiscal 2024. The decrease in free cash flow is driven by lower operating cash inflows and higher capital investments as compared to the first quarter of fiscal 2024. The Company ended the quarter with a cash balance of $731 million.
"As I step into the CEO role, my vision is clear: NAV CANADA will continue to prioritize safety, propel innovation, and enhance service to our customers in this next chapter," says Mark Cooper, NAV CANADA, President, and CEO. "We are committed to fostering a thriving culture and workplace where collaboration and innovation grow. Together, we are building on our strengths to create greater value for our customers, employees, and stakeholders."
Operating expenses for the first quarter of fiscal 2025 were $428 million as compared to $381 million over the same period in fiscal 2024, primarily due to higher compensation costs driven by an increase in both staffing and wage levels as well as increased costs related to system maintenance and development.
Other income and expenses for the first quarter of fiscal 2025 was income of $4 million as compared to expenses of $17 million over the same period in fiscal 2024, primarily due to an increase in the fair value of the Company's investment in Aireon.
The Company had a net income (before net movement in regulatory deferral accounts including rate stabilization) of $25 million in the first quarter of fiscal 2025 as compared to net income of $66 million for the first quarter of fiscal 2024.
The Company is subject to legislation that regulates its approach to setting charges. The timing of the recovery of certain revenue and expenses through customer service charges is managed through movements in regulatory deferral accounts. The net movement in regulatory deferral accounts for the first quarter of fiscal 2025 was an expense of $25 million as compared to an expense of $45 million over the same period in fiscal 2024. This change in regulatory deferrals is primarily due to a decrease in favourable rate stabilization adjustments of $34 million and a $14 million net decrease in adjustments required to align the accounting recognition of certain transactions to the periods in which they will be considered for rate setting, mainly due to the deferral, for rate setting purposes, of the increase in the fair value of the Company's investment in Aireon. As at November 30, 2024, the rate stabilization account had a balance of $152 million to be recovered from customers through future customer service charges.
Associated Links
The Company's Financial Statements and Management's Discussion and Analysis for the three months ended November 30, 2024 can be found at:
Financial Statements
Management's Discussion and Analysis
About NAV CANADA
NAV CANADA is a private, not-for-profit company, established in 1996, providing air traffic control, airport advisory services, weather briefings and aeronautical information services for more than 18 million square kilometres of Canadian domestic and international airspace.
The Company is internationally recognized for its safety record and technology innovation.
(1) | Weighted charging units represent a traffic measure that reflects the number of billable flights, aircraft size and distance flown in Canadian airspace and is the basis for movement-based service charges, which comprise the vast majority of the Company's revenue. |
(2) | Free cash flow is a non-GAAP financial measure used by the Company to enhance the overall understanding of its financial and operating performance. Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines free cash flow as cash generated from operations, less capital expenditures (net of government grants received), investments in regulatory assets, investments in Aireon LLC and equity related investments and principal payment of lease liabilities. Management places importance on this indicator as it assists in measuring the impact of its investment program on the Company's financial resources and provides users with a more stable indication of the Company's ability to meet its debt obligations and continue to invest in the air navigation system. |
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. |
SOURCE NAV CANADA