Embraer profit and revenues dip in 2010

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Brazilian airframer Embraer has posted a 29% fall in full-year net profit in 2010 to $330.2 million, but says it expects recovery to continue in the market in 2011.

It reported a 2% decline in revenues to $5.4 billion for the year ended 31 December 2010; operating profit rose 3% to $391.7 million.

The company saw a record year in its executive aviation business in 2010, delivering a total of 144 aircraft.

This was an increase over 2009's figure of 115 aircraft, largely driven by higher deliveries of its Phenom 100 and 300 models. It points out that the Phenom 100 has the fastest growing market share in the business aviation sector.

Last year also saw certification and the start of deliveries for its Legacy 650 jet; first flight of its mid-size Legacy 500 will follow in 2011.

Overall, the division contributed some $1.1 billion to the company's revenues during 2010. It forecasts this rising slightly to $1.2 billion in 2011.

"We believe 2011 will be another important year for Embraer's consolidation in the business aviation arena," says Luis Carlos Affonso, executive vice-president, executive jets. It expects to deliver 118 jets this year.

However, it cautions over the pace of recovery in 2011 and warns that the segment's book to bill ratio will be below one.

In the commercial aviation operation, it delivered 101 aircraft during 2010, down on the previous year's figure of 122. The majority of the aircraft were Embraer 190s.

It sold another 97 jets during the period, which Paulo Cesar de Souza e Silva, the company's executive vice-president for the airline market, describes as "a strong indication of market confidence in Embraer jets".

The division generated revenue of $2.8 billion during 2010, a fall on 2009's figure of $3.3 billion.

It forecasts the market will continue to recover in 2011, predicting deliveries of 102 commercial jets, generating revenue of $3.1 billion.

Embraer's defence business also remained steady, maintaining a strong backlog of $3.3 billion. It sees the defence market as still offering opportunities for growth, despite shrinking defence budgets in the US and Europe.

Highlights for the division in 2010 included the delivery of a total of five Super Tucano aircraft to Ecuador and the Dominican Republic, alongside an order from Indonesia for eight of the type.

It is also making good progress on its KC-390 airlifter, with 60 orders now booked for the type.

Embraer's defence business generated revenue of $669.8 million during the period, which is expected to remain at a similar level in 2011.

Aviation services contributed revenues of $563.8 million with another $96.7 million from other business.