Embraer recorded a net loss of 467 million reais in the 2nd quarter with fewer deliveries and problems with freighters

Embraer reported a net loss to shareholders of $ 467.0 million in the second quarter, compared to a profit of $ 200.9 million in the same period last year, in a quarter marked by a drop in shipments and increased costs with the development of the KC-390 military freighter.

Excluding deferred taxes, welfare charges and one-time charges, adjusted net income was $ 2.3 million, compared with $ 409.4 million in the second quarter of Last year, according to manufacturer of Brazilian planes Tuesday.

Operating income as measured by earnings before interest, taxes, depreciation and amortization (Ebitda) fell 83% to R $ 140.4 million in the second quarter, including a non-recurring negative impact of 458 , R $ 7 million. Revised the cost base of the KC-390 cargo development contract, due to the incident with the prototype occurred in May.

EBITDA margin fell to 3.1% in the second quarter, up from 14.6% a year earlier.

Adjusted for Adjusted Cargo Cost, Adjusted EBITDA increased from R $ 803.4 million to R $ 599.1 million in the same period in 2017. Adjusted EBITDA margin fell at 13.2% 14.1% a year earlier.

"The company reaffirms all its financial and delivery estimates for 2018, which do not include the one-time impact of the KC-390 cost base revision in the second quarter," Embraer said in a statement. a note of publication.

Embraer's business figure fell 20% to 4.533 billion reais in the second quarter due to lower shipments in the commercial and executive aviation segments and the 39, a 90% decrease in defense and security due to the incident with the KC-390. Consolidated gross margin increased from 17.8% in the second quarter of last year to 10.7%.

In the second quarter, Embraer delivered 28 commercial aircraft and 20 frames, compared with 59 aircraft in the second quarter of last year. Despite this decline, Embraer plans to deliver 85 to 95 commercial aircraft and 105 to 125 business aircraft for the year.

Embraer reached an agreement with US company Boeing in July to form a $ 4.75 billion joint venture in the commercial aviation sector. Boeing will take control of the commercial aviation division, the company's largest revenue generator, with an 80% stake in the joint venture.

The commercial aviation segment accounted for 60.5% of Embraer's total net income, down from 52.8% a year earlier, while the defense and Security declined to 2.2% 17.1% in 2017, due to lower revenues in the period.

The Services & Support segment grew by 18% to R $ 918.5 million, representing 20.3% of the company's net sales, compared to 13.7% in the same period. 2017.

DEBT AND INVESTMENTS

Embraer generated 175.5 million reais of adjusted free cash flow in the second quarter and, at the end of June, had a cash position of 12.88 billion reais, with a gross debt of 15.66 billion reais.

The increase in net debt of 10.3% from the previous quarter to R $ 2.781 billion at the end of June reflected the change in the exchange rate over the period, the company said.

Embraer invested $ 58.6 million in the second quarter, bringing the total applied in the first half to $ 132.6 million. The company estimates that investment spending is expected to increase in the second half of the year, but is expected to be less than $ 200 million estimated by the company for the year.